India's palm oil imports in August jumped 87% from a month ago to the highest level in 11 months as a sharp drop in prices prompted refiners to ramp up purchases, a leading trade body said on Tuesday.
Higher palm oil purchases by the world's biggest vegetable oil importer could support palm oil futures and help top producer Indonesia in bringing down ballooning inventories.
India's palm oil imports in August rose to 994,997 tonnes from 530,420 tonnes in July, the Solvent Extractors' Association of India said in a statement.
Refiners were aggressively buying palm oil for August shipments as its discount over rival soyoil and sunflower oil widened above $300 per tonne in July, said a Mumbai-based dealer with a global trading firm.
"The discount made palm oil attractive even after paying duty," the dealer said.
Palm oil imports attract 5.5% tax, while New Delhi has allowed duty-free imports of 2 million tonnes each of soyoil and sunflower oil for the current and next fiscal years.
India could import around 1 million tonnes of palm oil in September as it was trading at a hefty discount to soyoil, said a New Delhi-based dealer with a global trading firm.
Crude palm oil is being offered at $955 a tonne, including cost, insurance and freight (CIF) in India for September shipments, compared with $1,315 for crude soyoil, according to data compiled by SEA.
"Indonesia is flooding the market. Its duty free exports policy is making palm attractive," the dealer said.
Indonesia has extended to Oct. 31 a policy of not collecting levies for palm oil exports.
Soyoil imports in August halved from a month ago to 244,697 tonnes, while sunflower oil imports fell 13% to 135,308 tonnes, the SEA said.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Ukraine and Russia. (Reporting by Rajendra Jadhav and Arpan Varghese in Bengaluru; Editing by David Goodman and Anil D'Silva)