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Date
 20/11/2001
News Source
 NULL
Headline
 India's palm oil import demand seen rising

KUALA LUMPUR, Nov 19 (Reuters) - Tight global soyoil supplies and fallingdomestic edible oil stocks will encourage Indian buyers to increase palmoil imports for the rest of 2001 despite higher taxes, traders said.Benchmark prices have fallen six percent from a recent three-month peak,offering another incentive for Indian buyers to lock in imports atrelatively cheaper prices, traders said.They said they expected India's palm oil imports to reach around 325,000tonnes in November, higher than normal imports of around 250,000 tonnes.Around 225,000 tonnes would be imported from Malaysia, the world's biggestproducer of palm oil, and the rest from Indonesia, the second biggestproducer, they forecast.India imported 162,797 tonnes of palm oil from Malaysia in October."With domestic edible stocks falling to 250,000 tonnes from 500,000 tonnesin August, India now realises it doesn't have stocks in place," said onetrader in Malaysia."Argentine and Brazilian soyoil is well-sold and it will take 30 days ifIndia turns to South America for soyoil. Palm oil only needs seven days toship from Malaysia."Traders forecast India's edible oil imports would total 5.5 million tonnesin 2001, up from 5.1 million tonnes last year. Most imports are palm oil.They said imports would rise to 6.0 million tonnes in 2002.Malaysia's palm oil exports to India are expected to total 2.3 milliontonnes in 2001 and Indonesia is expected to ship around 1.2 milliontonnes.Cheaper prices for Refined, Bleached, Deodorised (RBD) palm olein comparedwith soyoil is also a reason why buyers in India, the world's largestedible oil importer, would favour palm oil despite the higher tax.January RBD olein was quoted last week at $315/tonne FOB Malaysia against$350 for soyoil FOB Argentina.Indian duties on RBD palm olein and soyoil are currently 85 percent and 45percent respectively. Crude palm oil import duty stands at 65 percent.

 


"HERD" MENTALITY


Third-month Malaysian palm oil futures reached a three-month peak of 1,170ringgit ($307.89) a tonne on November 13.But on Friday the benchmark third-month February contract closed down 19ringgit at 1,096 ringgit ($288.42), 6.3 percent below the November 13high."You will see the Indians coming back. They have this "herd" mentality. Imean if someone does something, everyone else will follow," said thetrader."My impression is India will continue to import palm oil in largequantities. Argentina can't supply the whole of India's requirements,"said another trader in Malaysia.In October, he said, Brazil, Argentine and the United States exported576,000 tonnes of soyoil, in which India only took 38,000 tonnes."This fact shows that India won't be receiving soyoil in the coming monthsbecause there's not enough stock for them. They should be buying palm oil.In addition, India is now having its soybean harvest," he said.India purchased 2.03 million tonnes of palm oil from Malaysia in 2000,down from 2.4 million tonnes in 1999.


 



ECONOMICS & INDUSTRY DEVELOPMENT DIVISION
Malaysian Palm Oil Board ( MPOB ) Lot 6, SS6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor Darul Ehsan, MALAYSIA.
Tel : 603 - 7802 2800 || Fax : 603 - 7803 3533