India’s palm oil purchases probably climbed for a fourth straight month in May as a drop in global prices boosted demand amid a stronger local currency.
Imports rose 21 percent to 798,000 metric tons from a year earlier, according to the median of five estimates in a Bloomberg survey of processors, brokers and analysts. Total vegetable oil purchases rose about 29 percent to 1.32 million tons, the survey showed. The Solvent Extractors’ Association of India is set to release trade data in the middle of the month.
Benchmark futures fell for a fifth month in May, marking the longest monthly losing streak since 2005, as traders expect production in Malaysia and Indonesia to recover from El Nino-related drought. Prices have dropped 21 percent this year, benefiting buyers in India, which relies on imports to meet more than 70 percent of its cooking oil needs.
“Low global prices, along with a stronger rupee, made the landed price of palm oil cheap,” said Sandeep Bajoria, chief executive officer of Sunvin Group, a Mumbai-based broker and consultant for the oilseeds industry. The rupee has strengthened 5.5 percent against the dollar so far this year, according to data compiled by Bloomberg.
Palm oil for August delivery on Bursa Malaysia Derivatives climbed 0.5 percent to 2,457 ringgit ($576) a ton. “Ramadan demand amid low international prices is boosting palm oil imports,” said Veeresh Hiremath, head of research at Hyderabad-based Karvy Comtrade Ltd. “There is a recovery in production in source nations.”