New Delhi Cooking-oil imports by India, the biggest palm oil buyer, will climb as much as 12 per cent to a record after dry weather and excessive rain curbed oilseed crops, according to GG Patel & Nikhil Research Co.
Purchases will total 9.2 million metric tonnes to 9.4 million tonnes in the year that began on November 1, compared with 8.37 million a year earlier, said Managing Partner Govindlal G. Patel, who has traded vegetable oils for more than three decades. India bought a record 8.82 million tonnes in 2009-2010.
The tropical oil, used in everything from candy bars to biofuels, advanced to the highest level in eight months on Tuesday as dry weather cut soybean harvests in South America. Global inventories of soybean and palm oils will drop to 7.84 million tonnes by the end of 2011-2012, the lowest in four years, US Department of Agriculture data show. About 80 per cent of India's purchases consist of palm oil.
It's "a cheaper option for India", Ryan Long, vice-president of futures and options at OSK Investment Bank Bhd., said by phone from Kuala Lumpur. "Higher demand from India will support palm-oil prices."
The May-delivery contract gained 0.5 per cent to 3,285 ringgit a tonne on the Malaysia Derivatives Exchange yesterday.
Futures, which have rallied from a 12-month low of 2,754 ringgit on October 6, may reach 4,000 ringgit by June as demand growth outstrips production, according to Dorab Mistry, director of Godrej International Ltd.
Shipments from Malaysia may jump to a record 19.8 million tonnes this year from last year's 18 million tonnes, aided by rising demand in India and China, Lee Yeow Chor, chairman of the Malaysian Palm Oil Council, said last month.
