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India's palm oil imports may rise to meet rising demand as stocks deplete

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·2 min read
FILE PHOTO: A Sime Darby Plantation worker shows palm oil fruits at a plantation in Pulau Carey
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By Rajendra Jadhav

MUMBAI (Reuters) - India's palm oil imports are set to rebound in March and April to meet rising demand from hotels and restaurants, as lower shipments last month have depleted stocks, according to industry participants.

Higher imports by India, the world's biggest buyer of the edible oil, is likely to support benchmark Malaysian palm oil prices that hit their highest level in a decade on Monday.

India's palm oil imports in February fell to around 400,000 tonnes to its lowest in 10 months, as sellers were offering steep discounts for shipments in March and April over prompt delivery, said Sudhakar Desai, president of the Indian Vegetable Oil Producers' Association (IVPA).

"Stocks need to be replenished. Palm oil imports could pick up to 600,000 tonnes per month in March and April," Desai said.

Crude palm oil stocks at Indian ports have declined to around 265,000 tonnes at February end, compared to 358,000 tonnes a month before, estimates Sandeep Bajoria, chief executive officer of Sunvin Group, a vegetable oil broker.

India imports palm oil mainly from Indonesia and Malaysia, and other oils such as soy and sunflower oil from Argentina, Brazil, Ukraine and Russia.

A sharp rise in edible oil prices has been reducing demand and even prompting some consumers to switch to cheaper oils, Bajoria said.

"A few consumers are shifting to palm oil from sunflower oil and soyoil. Some are moving to soyoil from sunflower oil."

Crude palm oil is being offered at around $1,120 a tonne, including cost, insurance and freight (CIF), in India, compared with $1,270 for degummed soybean oil and $1,700 for crude sunflower oil, traders said.

Rapeseed supplies from new crop would be available for crushing from April onward and that could limit edible oil imports, said B.V. Mehta, executive director of the Solvent Extractors' Association (SEA), a Mumbai-based trade body.

(Reporting by Rajendra Jadhav; Editing by Rashmi Aich)