Mumbai:
Palm oil imports from India in May are expected to rise above 600,000 tons despite the export restriction imposed by Indonesia, as most of the contracted quantity will be loaded before the Jakarta ban comes into effect, traders told Reuters.
The world’s largest palm oil exporter plans to halt shipments of refined, bleached and deodorized (RBD) palm olein from Thursday, but will allow exports of crude palm oil (CPO) or other derivatives.
The ban could hurt imports from India in June as refineries struggle to secure supplies from Malaysia, traders said.
“Ship loading is almost ready for shipments in May in Indonesian ports. That amount is due to be unloaded in India next month,” said Sandeep Bajoria, chief executive of Sunvin Group, a Mumbai-based vegetable oil brokerage and consulting firm.
India is the world’s largest importer of palm oil and depends on Indonesia to supply almost half of its palm oil needs of about 700,000 tons per month.
In March, India imported 207,362 tons of palm oil from Indonesia, including 145,696 tons of RBD palm olein.
Since Indonesia has not banned exports of CPO, Indian refineries will also buy small quantities in the coming months, a Mumbai-based dealer with a global trading company said.
“Indonesian CPO supply for export is very limited. Buyers will switch to Malaysia, but it has a limited surplus,” said the dealer.
India imported 539,793 tons of palm oil in March, while the supply is expected to reach 600,000 tons in April.
Before Indonesia announced restrictions, industry officials expected India’s palm oil imports could rise above 650,000 tons in May, but now they expect shipments of just over 600,000 tons.
“Indonesia and Malaysia are the main suppliers of palm oil, but in the coming months the industry will try to get more palm oil from Thailand and Papua New Guinea,” said Atul Chaturvedi, president of the trade organization Solvent Extractors Association of India (SEA).
But the supply of these small producers is insufficient and there could be a shortage in June, Chaturvedi said.
India also imports soybean oil from Argentina and solar oil from Ukraine and Russia, but their supply is limited.