PREVIEW: India's June refined palm oil imports seen down - Reuters
11-Jul-2012 23:56 By Ratnajyoti Dutta
NEW DELHI, July 11 (Reuters) - India's refined palm oil imports fell in June as the world's biggest vegetable oil importer looked likely to raise taxes to cut cheap supplies from Indonesia, traders surveyed by Reuters said. India's refined vegetable oil imports have been rising since October 2011 when Indonesia, the world's No. 1 palm oil producer, tweaked its export duties to make refined oils more attractive than crude palm oil to promote its own refineries. Traders' forecasts for refined palm oil imports in June ranged between 110,000 and 150,000 tonnes, with the average at 128,333 tonnes, down 22.4 percent from May. Stung by Indonesia's move, many Indian refiners have been requesting the government to take steps to protect local refineries, with some units facing closure. On Thursday, ministers are likely to review the demand of domestic processors to make refined palm oil imports costlier by raising taxes.
Expectations of a possible increase in import taxes in June led to lower purchases of refined palm oils. In May, imports rose in the run up to the Muslim holy month of Ramadan when fasting in the day is followed by an elaborate feast at night. In the first seven months of the current year from November, India's refined palm oil imports almost doubled to 1.1 million tonnes from the year-ago period, stoking fears of falling margins for domestic refineries. Traders said refined palm oil imports were likely to stay over last year's average of 90,000-100,000 tonnes per month if the government did not introduce protective measures. Imported palm oils were about $40-50 per tonne more expensive in June than in the previous month due to worries over supplies of soyoil when dry weather conditions hit the soybean crop in the United States. Imported refined palm oil was quoted at around $1,050 per tonne on a cost and freight basis on India's west coast, while imported crude palm oil was quoted at $990 per tonne.
Higher prices cut total palm oil imports by 15.5 percent last month to 583,125 tonnes, according to the average of a survey of eight traders. On Wednesday, benchmark September palm oil futures FCPOc3 on the Bursa Malaysia slipped 1.5 percent to close at 3,082 ringgit ($970) per tonne. The Solvent Extractors' Association of India, a leading trade body, is scheduled to release June import figures later this week. India, the world's leading vegetable oil importer, mainly buys palm oils from Indonesia and Malaysia, and small quantities of soyoil from Argentina and Brazil. About half of India's 15-16 million tonnes of annual demand is met through imports. Traders said imports of soyoil rose in June due to the arrival of some delayed vessels from South America, while sunflower fell, reflecting lower demand for fried food stuffs during the summer.
Soyoil imports in June are seen more than doubling from May to 151,875 tonnes, while the monthly sunflower oil imports were down by about a quarter to 94,375 tonnes in June, the survey showed. Lower domestic demand and higher imports in April and May pushed up June stocks at Indian ports by 21.5 percent to 708,750 tonnes, it showed. Total June vegetable oil imports, including small amounts of non-edible oils, are likely to have fallen by 4.7 percent to 854,375 tonnes from May. "Imports will be around 800,000-850,000 tonnes in July," said Sadeep Bajoria, chief executive of Mumbai-based Sunvin Group. About 80 percent of India's total cooking oil imports are palm oils, while the rest are soft oils.
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