India's CPO Imports to Increase, Surge in Price will Continue

At the close of trading on the Bursa Malaysia on Friday (14/10), the CPO price for the December 2016 most active contract rose by 47 points to reach 2,665 ringgit (US$632.64) per ton.
A Bloomberg survey revealed that CPO imports by the Hindustan nation are expected to increase by 2.1% to 800,000 tons in September. This number represents the first rise since April 2016.
Total imports of vegetable oil last month were predicted to reach 1.36 million tons, a 12% increase (month-on-month). Official import data from the Solvent Extractors’ Association (SEA) of India will be released in mid-October.
Nagaraj Meda, managing director of TransGraph Consulting, said that rebounding purchases of CPO by India, the world’s largest consumer, is helping prices to stay high even though they are being held back by recovery in production. The impact of dry weather caused by the El Nino previously disrupted the planting process in Indonesia and Malaysia in the early part of the year.
Demand from India normally increases during the Hindu festival from September to November, because people eat more fried food and sweets. The festival reaches its peak with Diwali on 30 October 2016.
`At present, the supply of vegetable oil is low, so imports must be increased in order to meet domestic demand,` said Meda, as quoted by Bloomberg on Sunday (16/10/2016).
According to the SEA, cooking oil stocks on 1 September reached only 2.06 million tons, significantly down compared to 1 January which reached 2.51 million tons. India meets its cooking oil requirements through imports of around 70%.
India's CPO supply comes from Indonesia and Malaysia, while it obtains soybean oil from the US, Brazil and Argentina.

Editor : Saeno


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