PALM oil futures rose to its highest in more than two months yesterday on expectation India, the biggest buyer of vegetable oils after China, may buy more as deficient rain in key growing areas threaten to cut output. India’s vegetable oil purchases in the year ending October 31 may jump 27 per cent to 8 million tons, the Solvent Extractors’ Association of India said yesterday. Imports in the nine months to July 31 jumped 55 per cent to 6.42 million tons, it said. Increased imports by the South Asian country may sustain a 48 per cent rally in global palm oil prices this year. The nation relies on overseas purchases to meet more than half its cooking oil needs, with palm oil accounting for 80 per cent of the total. October-delivery palm oil rose 2.2 per cent to RM2,515 a metric ton, the highest since June 5, on the Malaysia Derivatives Exchange. “We could see an unprecedented rally in palm oil because of higher import proposition from India,” Harish Gallipelli, a vice president at JRG Wealth Management Ltd, said from Kochi. The India Meteorological Department August 10 cut its monsoon forecast for a second time this season, saying showers in June- September period will be 13 per cent below normal, compared with a 7 per cent deficit estimated in June. Source : Business Times

A quarter of India’s 626 districts have declared drought, causing acreages of crops such as rice to shrink from year earlier levels. “Production of crops will suffer a major setback this year as the dryness has partly prevented plantings and will also curb the yield potential massively,” the Solvent Extractors’ said. “Erratic monsoons and likely lower oilseeds crop will further push up the imports in September and October.” Monsoon-sown oilseeds, including peanuts and soybeans, were planted to 15.1 million hectares in India as of August 6, compared with 15.6 million hectares a year ago, the farm ministry said.