India’s Palm Oil Imports Dropped

Aug Soybean closed lower last week due to improved sowing data. The area under soybean in the country increased by 6.4% compared to last year sowing at 101.53 lakh ha as of last week, according to data released by the farm ministry. However, expectation of increase in meal exports is keeping prices in a range.

Government has increased the export incentives on soymeal to 10% of the free-on-board value from the current 7% till Mar 31India’s soymeal exports in July are expected to hit a six-month high of around 150,000 tn, supported by increase in demand from European countries.

Moreover, mustard oil imports have been lower by 21% on year and 51.7% on month to 10,648 tonnes in June. Mustard seed futures jumped 3% in first half July on anticipation of improved meal and crushing demand. Recently, government increase import duty on soft edible oil by 10-15%.

Mustard oil mills across the country crushed 650,000 tn of the oilseed in June, down 27% from previous month as per data release by Mustard Oil Producers Association of India.

Higher duty and depreciation in Indian rupee against the dollar has slow down the imports. As per the data from SEA, India’s vegetable oil imports during June dropped 23% to 10.4 lakh tons (lt) compared to 13.4 lt in the same period a year ago. While imports for Nov-June fell by 2.2% to 96.4 lt compared to 98.6 lt on year. Edible oil imports fell to 10.07 lt in June compared to 12.9 lt in the same period a year ago on lower crude oil prices. Soyoil degummed imports fell marginally to 288,519 tons compared to 290,904 tons. For the second fortnight of July, the base import price of crude soyoil has been cut to $743 per tn from $750 per tn by the govt which is lowest since Jan 2016.

According to SEA monthly update, palm oil imports into the country were down 47% and 26% for CPO and RBD Palmolein in June compared to last year. India’s palm oil imports dropped in May due to higher taxes on shipments while weaker rupees making imports expensive. During Nov-Jun, palm oil imports declined to 55.6 lt from 59.3 lt.

Chana Aug futures closed lower last week on expectation that there will be sufficient supplies of Chana in the physical market as NAFED announce to auction its procured Chana. However, it closed higher on Friday due to short covering. Chana surged during July as government has extended the imports ban for dry peas for three more months. New notification says that pea import can’t take place till 30 Sep 2018. It is applicable for all peas. It surged 24.3% or Rs. 858 per quintal in July. Government has tried to keep the prices higher by removing export restrictions and procuring at MSP of Rs. 4,440 per quintal. Chana exports from the country also improved after government announced of a 7% duty credit incentive on exports in March 2018.

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