High Prices May Hit Vegoil Import.

New Delhi: Vegetable oil imports in February may have tumbled more than a quarter from January as buyers slowed imports due to high global prices and increased domestic oilseeds crushing, a Reuters survey showed on Friday.

India, the world's top vegetable oil buyer, buys mainly palm oils from Indonesia, Malaysia, and small quantities of soyaoil from Argentina and Brazil.

Early last month, the benchmark palm oil contract KPOc3 hit 3,967 ringgit ($1,306), a level not reached since March 2008, on supply concerns after massive floods in Malaysia swamped key oil palm areas and restocking by China after the Lunar Year break.

The country's vegetable oil imports, including non-edibles, in February are estimated to have fallen 26% from a year ago to 5,18,625 tonne, the average of forecasts in the survey showed.

India's palm oil imports may have fallen 29% in February over the previous month, according to the survey of eight traders, while soyaoil imports were likely to rise 68% on seasonal demand.

Trade body the Solvent Extractors' Association of India is expected to release its data next week.

In India, soyaoil demand rises in the winter season as demand for rival palm, a tropical oil, slows down as it solidifies at lower temperatures.

“The fall in month-on-month imports would continue in March as local oilseeds crushing gathers momentum,” said Bhagwat Garg, a New Delhi-based trade analyst.

Rapeseed, the main winter season oilseed crop, is harvested February onwards, raising domestic cooking oil supplies.

India will likely process 12% more local oilseed crops into cooking oil this year aided by normal rains, and is likely to trim imports of edible oil by up to 5% in the first such slowing in five years, easing global prices and blunting food-driven inflation. Low domestic prices improved demand for edible oils, reducing stocks at Indian ports by 5.6% to 533,125 tonne, the survey showed.

Source : financialexpress.com