Palm oil demand boosted as rival oil prices jump on supply woes (updated)

Patanjali Foods

10/08/2023 10:11

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    By Rajendra Jadhav
       MUMBAI, Aug 10 (Reuters) - Demand for palm oil has been
increasing as its discount to soyoil and sunoil has grown,
driven by the recent price rise in rival oils due to production
concerns in the U.S. and supply disruptions from the Black Sea
region, industry officials said.
    This surge in demand is expected to assist Indonesia and
Malaysia in bringing down their palm oil inventories,
simultaneously bolstering Malaysian palm oil futures  FCPOc3 .
    "Aggressive pricing has been aiding palm oil as buyers are
shifting toward palm oil from other oils for near-month
shipments," said Sanjeev Asthana, chief executive officer at
Patanjali Foods Ltd  PAFO.NS , India's top palm oil buyer.
    India, the world's biggest buyer of edible oils, imported
1.09 million metric tons of palm oil in July, nearly 60% more
than June and the highest in seven months.
    India's imports would remain robust during August and
September as well, Asthana said.
    Crude palm oil is offered at $910 a tonne including cost,
insurance and freight (CIF) to India for September shipments,
compared with $1,050 and $1,010 for crude soyoil and crude
sunflower oil respectively, dealers said.
    
    Soyoil prices jumped in the last one month on production
concerns in the United States and lower supplies from top
exporting Argentina, while sunflower oil became expensive after
Russia withdrew from the Black Sea grains deal, said a New Delhi
based dealer with a global trade house.
    The Black Sea region accounts for 60% of world sunflower oil
output and 76% of exports. 
    "Palm oil prices didn't rise; instead, they came down due to
rising stocks in the producing countries and become even more
cheaper for buyers," the dealer said.
    Price-sensitive Asian buyers traditionally rely on palm oil
because of low costs and quick shipping times. 
    Along with India, China, Bangladesh, and Pakistan have also
been raising palm oil purchases for August and September
shipments, said a Mumbai-based trader.
    China's July vegetable oil imports, which mainly consist
palm oil, jumped 48% from a year ago to 778,000 tonnes.
    Palm oil's discount to rival oils is likely to come down
gradually as rising exports would bring down the inventories in
both Malaysia and Indonesia, the trader said.
    Malaysia's palm oil exports rose 15.55% to 1.35 million tons
in July, according to the Malaysian Palm Oil Board. In the first
ten days of August, exports of Malaysian palm oil products rose
17.5% to 383,795 tons, AmSpec Agri Malaysia said on Thursday.

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Palm oil becomes lucrative than soyoil, sunoil    https://tmsnrt.rs/3Ow64yp
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 (Reporting by Rajendra Jadhav; editing by David Evans)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters
Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))