India has started restocking with palm oil as the Asian festival season draws to a close and China made more enquiries than deals this week since vegetable oil stocks at its ports were high.India, the world’s top importer of vegetable oils, bought 15,000 to 20,000 tonnes of crude palm oil at US$660-$672 (RM2,216 –RM2257) a tonne for Oct/Nov delivery.
That signals some restocking activity was underway even before the major Hindu festival of Diwali this weekend.
A week ago, the South Asian country purchased 25,000 tonnes of crude palm oil at US$632-US$640 per tonne after a two-week hiatus from vegetable oil markets, a leading Indian trader said.
Malaysian palm oil futures, which give direction for cash prices, have climbed 4 percent since Friday on a crude oil rally and signs of better exports.
But that has kept Chinese buyers on the sidelines, looking for more concrete details on global palm oil demand, traders say.
“November and December are traditionally the weaker months for palm oil demand, and stockpiles of edible oils at China’s ports are at quite high a level,” said a trader in Guangzhou city in southern China. She did not estimate the stock level.
“Unless there is some positive news flow for palm oil demand, I don’t think buyers will be keen in taking up more palm oil in the next two months,” the trader said.
She said her firm bought some 5,000 tonnes of palm olein for November delivery, at US$660-US$670 a tonne.
Other traders dealing with China say there have been enquiries but very few deals signed, partly because the second largest buyer in the world has just finished an eight-day holiday early this month.
Cargo surveyor Intertek Testing Services reported a 12.6 per cent jump to 596,515 tonnes for Malaysia’s Oct 1-15 palm oil exports from a month ago. Shipments to China were down 24 per cent and India’s exports were 5.8 per cent lower.
India is looking to buy more crude palm oil as its discount to rival soyoil from Argentina has widened to more than US$200 a tonne with landed cost at US$870 a tonne.
A state-run trading firm MMTC Ltd has bought 18,000 tonnes of RBD palm olein at US$692 per tonne to meet Hindu festival demand, two government officials said on Tuesday.
“There was a break in buying but palm oil remains attractive and soyoil imports are not going to happen for the next 4-6 weeks at least as we have our own domestic soy crop coming in,” said a trader from India’s port city of Mumbai.
Indian traders peg local soyoil prices at US$50-US$60 a tonne lower compared to imported soyoil mostly from Argentina and Brazil.
India’s soybean crop in the year to Sept 2010 will be harvested from October onwards and it is expected to hit 9 million tonnes, 5.9 per cent higher than the estimated crop of 8.5 million tonnes this year, traders and crushers said.
Neighbouring Bangladesh, which buys 80,000 tonnes of palm oil products monthly, has slowed its purchases to 14,500 tonnes in the first half of Oct.
It bought the first cargo of 12,000 tonnes at between US$680 and US$690 a tonne and the second 2,500 tonne cargo at US$702.50 a tonne.
“The winter months are up ahead of us and soyoil is better suited for the cold,” said a Singapore-based trader dealing mostly with the South Asian country.
“We are looking at maybe 50,000 to 60,000 tonnes of soyoil monthly for November and December and very little palm oil.” — Reuters
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