Aug 6 2010 10:01AM
KUALA LUMPUR (Dow Jones)--India, the world's second-largest vegetable oils consumer after China, may purchase more palm oil in the next two months than soyoil, as palm oil's discount has widened, a Mumbai-based trading executive said Friday.
In recent months, India has imported more soyoil after a bumper soybean crop dragged prices lower even as palm production growth remained sluggish. But weather concerns over U.S. and South America soybean crops propelled soyoil prices higher, making it a more expensive commodity compared with the cheaper palm oil.
India is seeking between 550,000 and 600,000 metric tons of palm products, including crude palm oil and refined products, this month as the price gap with rival soyoil from Argentina has widened to $100/ton on a delivered basis from $40-$50/ton in the last two months, Govindlal G. Patel, director at Mumbai-based vegetable oils importer Dipak Enterprise, said by phone.
The festival season buying from India may support CPO prices on Malaysia's derivative exchange, which rose 1% to MYR2,645/ton at 0324 GMT--the highest level since March 11.
Importers in India have stepped up purchases as demand is expected to increase during the festive period that begins later this month with Ramadan, the Muslim month of fasting, and ends with the celebration of the Hindu festival Diwali in November.
India imported 421,462 tons of CPO in June, while refined, bleached and deodorized palm olein imports stood at 42,282 tons, according to data from the Solvent Extractors' Association of India.
Patel said India has probably covered 65%-70% of its August requirement
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