India’s palm oil imports in May are set to rise above 600,000 tonnes despite the restriction imposed by Indonesia on exports as most of the contracted quantity will be loaded before Jakarta’s ban becomes effective, traders told Reuters.
The world’s biggest palm oil exporter plans from Thursday to stop shipments of refined, bleached and deodorized (RBD) palm olein but will allow exports of crude palm oil (CPO) or other derivative products.
The ban could dent India’s imports in June as refiners are struggling to secure supplies from Malaysia, traders said.
“Vessel loading is nearly done for May shipments at Indonesian ports. That quantity would be unloaded in India next month,” said Sandeep Bajoria, chief executive of Sunvin Group, a Mumbai-based vegetable oil brokerage and consultancy firm.
India is the world’s biggest importer of palm oil and relies on Indonesia to fulfil nearly half of its palm oil requirement of around 700,000 tonnes per month.
In March, India imported 207,362 tonnes of palm oil from Indonesia, including 145,696 tonnes of RBD palmolein.
As Indonesia hasn’t banned exports of CPO, Indian refiners will also buy small amounts in the coming months, said a Mumbai-based dealer with a global trading firm.
“Indonesian CPO supplies for exports are very limited. Buyers will switch to Malaysia, but it has limited surplus,” the dealer said.
India imported 539,793 tonnes of palm oil in March, while shipments in April are expected to rise to 600,000 tonnes.
Before Indonesia announced restrictions, industry officials were expecting India’s palm oil imports in May could rise above 650,000 tonnes, but now they are expecting shipments of slightly more than 600,000 tonnes.
“Indonesia and Malaysia are main suppliers of palm oil, but in coming months industry will try to source more palm oil from Thailand and Papua New Guinea,” said Atul Chaturvedi, president of trade body the Solvent Extractors Association of India (SEA).
But supplies from these small producers are insufficient and there could be a shortage in June, Chaturvedi said.
India also imports soyoil from Argentina, and sun oil from Ukraine and Russia, but their supplies are curtailed.