ECONOMY

Palm Oil Purchases by India Will Jump 11 Per Cent This Year

Palm oil purchases by India will probably jump almost 11 per cent this year, with a relatively faster rise in prices of competing cooking oils prompting some users to switch to tropical oil. Imports of palm oil by the nation, where consumption of fried foods generally surges during festivals, wedding seasons, and long holidays, may climb to 8 million tons in the year ending in October, according to the median of six estimates in a Bloomberg survey of traders, analysts and importers.

Still, overall edible oil use is seen little change at 21.3 million tons this year as inbound shipments of expensive sunflower oil and soybean oil will drop, the survey showed. Their prices have surged 28 per cent and 29 per cent respectively so far this quarter, whereas palm oil has gained just 7 per cent. Soybean oil imports will likely drop to 3.25 million tons in 2020-21, from 3.38 million tons a year earlier, while sunflower oil purchases may slump to 1.75 million tons, from 2.52 million tons, according to the survey. India may buy 12.6 million tons of edible oils in 2020-21, Dorab Mistry, director of Godrej International Ltd, said at a seminar this week.

Some consumers will likely shift to palm oil from other oils, said G.G. Patel, managing partner of GGN Research. In some local markets, the prices of refined sunflower oil per kilogram are 55 rupees more than processed palm oil, while refined soybean oil is about 7.5 rupees higher. Weaker imports of sunflower oil and soybean oil may potentially support domestic prices of the two commodities and encourage farmers in the world’s second-most populous nation, which imports 70 per cent of its edible oil needs, to produce more.

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