YOGYAKARTA, Indonesia June 3 (Reuters) - India's palm oil imports ahead of its festival season will tumble 30 percent to 1.13 million tonnes for July-September shipments from a year ago, on a high domestic oilseed crush, traders said on Thursday.
Palm oil mostly bought from Indonesia has also given up some of its market share to Argentine soyoil that has narrowed its price difference with palm oil to below $50 a tonne from $150 two months ago.
India, the world's largest consumer of vegetable oils, will mark a string of religious events, starting with the Muslim holy month of Ramadan in August and ending with the Hindu festival of Diwali in November.
Last year in the July-September run up, India bought a record 1.6 million tonnes of palm oil products that consist mainly of crude palm oil with smaller quantities of refined palm olein and palm kernel oil, industry data showed.
"We are not going to make much of an impact on India this year," said an Indonesian palm oil exporter at the sidelines of an industry conference in Java.
"Although we still have market share, the Indian middle class can now afford to pay the slight premium for soyoil since the economy is strong and there are ample soyoil supplies that brought down the prices."
Declining interest from India, is in part due to a normalising of the monsoon that irrigates oilseed crops across the subcontinent.
India has about 70 percent of this year's oilseed output of around 26 million tonnes to process, and crushing is likely to pick up this month as the monsoon travels across the country.
That could weigh on benchmark crude palm oil futures in Malaysia, which have fallen about 7 percent so far this year.
Another Indonesian trader said India bought crude palm oil at $790 a tonne cost and freight (C&F) this week, just 5.6 percent cheaper than South American soyoil at $837 a tonne C&F.
"They (Indian traders) are waiting for a further price decrease," said a trader with Singapore listed company holding Indonesian estates.
"I am confident they will buy at least more than what was contracted for April-June shipment that was slightly more than a million tonnes."
But soyoil is seen at least taking 100,000 tonnes of market share from palm oil in the second quarter, a trend that will continue into July-September as more South American soyoil supplies hit markets, an Indian trader said.
"It all boils down to price. The only thing that might help palm oil is if production really soars this year. Perhaps then it can widen its discount with soyoil," the trader told Reuters from Indian port city of Mumbai.
Southeast Asian palm oil production, from Malaysia especially, is expected to rebound after a prolonged season of weak yields aggravated by the drier weather from El Nino condition, industry officials have said.
No comments:
Post a Comment