Palm oil imports by India tumbled to the lowest level in one year in February after inventories in the world’s biggest buyer expanded to a record.
Inbound shipments of crude and refined palm oil slid 23 percent to 503,951 metric tons from a month earlier, the lowest since February last year, the Solvent Extractors’ Association of India said in an e-mailed statement Friday. That was lower than the median estimate of 600,000 tons in a Bloomberg survey. Total vegetable oil imports, including for industrial use, declined 21 percent to 866,167 tons from January, it said.
Stockpiles in India jumped to a record after refiners and traders boosted imports on speculation the government may increase tax in its annual budget to curb inflow of cheap palm oil as Indonesia and Malaysia persisted with a zero-tax export policy to support prices. Inventories at the start of March totaled 2.01 million tons, near the record 2.1 million tons a month earlier and more than the monthly consumption of about 1.6 million tons, the association said.
“We imported larger quantities than normal requirement in the previous months expecting the duties to be raised,” B.V. Mehta, the association’s executive director, said on Friday. “Going forward, imports will rise as our domestic crushing is not much and our dependence on imports remains high.”
India’s cooking oil demand may jump to 25.7 million tons in 2020-21 from 19.3 million tons this year, with imports rising to 16.3 million tons from 11.6 million tons, Mehta said on Feb. 23. Futures for delivery in May were little changed at 2,245 ringgit ($609) a ton on the Bursa Malaysia Derivatives by 4:05 p.m. in Kuala Lumpur on Friday.
Prime Minister Narendra Modi’s government left import taxes unchanged in the budget on Feb. 28, ignoring a demand from the association to increase the duty on raw oils to 10 percent and that of refined oils to 25 percent. The tariff on crude palm oil imports was raised to 7.5 percent on Dec. 24 and on refined grades to 15 percent after shipments jumped to a record 11.8 million tons in the year ended Oct. 31.
Crude soybean oil imports rose 7 percent to 240,235 tons in February from 224,430 tons a month earlier while sunflower oil shipments slumped 59 percent to 63,375 tons, the association said. India also imported 31,926 tons of canola oil in February, it said.
Vegetable oil shipments in the four months ended February climbed 23 percent to 4.3 million tons from a year earlier, the association said. India meets more than 50 percent of its demand through palm oil imports from Indonesia and Malaysia and soybean oil purchases from the U.S., Brazil and Argentina.