MUMBAI, Oct 4 (Reuters) – India’s edible oil imports fell 19% in September from August’s record, as refiners cut palm oil purchases by 26% after inventories rose to a record, five traders told Reuters.
Lower purchases by the world’s largest importer of vegetable oils could lead to higher palm oil stocks in key producers Indonesia and Malaysia, weighing on benchmark futures.
India’s total edible oil imports in September fell to 1.5 million metric tonnes, including 830,000 tonnes of palm oil, traders’ average estimates show.
“Edible oil inventories have risen to unprecedented levels due to record imports in July and August,” said Rajesh Patel, managing partner at edible oil trader and broker GGN Research.
“That’s why buyers are pausing now.”
Domestic stocks of vegetable oil rose to 3.7 million tonnes on September 1 from 2.4 million a year ago, says trade body Solvent Extractors Association of India (SEA), which is likely to publish its data on stocks. imports from September to mid-October.
Sunflower oil imports fell 15% from the previous month to 310,000 tonnes, while soybean oil imports rose 2% to 365,000 tonnes, traders estimated.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soybean and sunflower oil from Argentina, Brazil, Russia and Ukraine.
“Dryer weather in June and August, coupled with a slow start to sowing, has raised concerns over domestic oilseed production,” said Ashwini Bansod, head of commodities research at Phillip Capital India Pvt Ltd.
“This led to higher demand for imports in July and August, before the festivals.”
But improved rainfall in September eased concerns about a steeper decline in oilseed production, the analyst added.
August was the driest month on record with a 36% rainfall deficit, although it revived in September with India receiving 13% more than normal.
Edible oil imports could fall further in October as stocks are more than enough to meet festival season demand, said GGN Research’s Patel.
Reporting by Rajendra Jadhav; Editing by Clarence Fernandez
Our standards: The Thomson Reuters Trust Principles.