RTRS- PREVIEW-India's July refined palm oil imports seen down

NEW DELHI, Aug 10 (Reuters) - India's refined palm oil imports are expected to have fallen in July for the second month in a row as importers feared the world's top vegetable oil buyer would raise duties on purchases to cut cheap supplies from Indonesia, a Reuters survey showed.

Traders forecast refined palm oil imports in July to be between 75,000 and 120,000 tonnes, with the average at 96,000 tonnes, down 22.7 percent from June.

The government finally raised the cost of imports from Aug. 1.

India's refined palm oil imports have risen since October 2011, when Indonesia, the world's No. 1 palm oil producer, changed its export taxes to promote downstream products. That prompted India's domestic refiners to demand measures to make the imports costlier.

The Solvent Extractors' Association of India, a leading trade body, will release July import data next week.

In the first eight months of the current year from November, India's refined palm oil imports surged by 89 percent to 1.2 million tonnes from the year-ago period, hitting margins for local refineries.

Traders said refined palm oil imports would return to around last year's average of 90,000-100,000 tonnes a month after the introduction of the protective step.

Total palm oil imports last month rose as prices eased by 4.8 percent, supported by a build-up of stocks in Malaysia, the world's No. 2 producer, and the euro zone crisis.

Palm oil imports rose 9.8 percent last month to 563,750 tonnes, according to the average of a survey of eight traders.

On Friday, benchmark October crude palm oil futures FCPOc3 on the Bursa Malaysia hit a low of 2,844 ringgit ($920) per tonne, back to the lowest levels this year touched on June 15.

Imported refined palm oil was quoted at around $990 per tonne on a cost and freight basis on India's west coast, while imported crude palm oil was quoted at $970 per tonne.

Imports of soyoil rose in July due to the arrival of delayed vessels from South America, while sunflower imports fell, reflecting lower demand for fried foods during the summer.

Soyoil imports in July are seen up 7.7 percent from June to 150,625 tonnes, while monthly sunflower oil imports were down by 11.8 percent to 77,500 tonnes in July, the survey showed.

Total July vegetable oil imports, including small amounts of non-edible oils, are likely to have risen by 4.7 percent to 820,500 tonnes from June.

The higher imports pushed up end-July stocks at Indian ports by 5.8 percent to 750,00 tonnes, it showed.

Imports of vegetable oils are unlikely to drop in the coming months as India's first drought in three years could reduce oilseeds output, leading to more imports in the next year from November.

"Imports could rise to as high as 950,000 tonnes in August," said Sat Narain Agarwal, a Delhi-based trader.

Indian importers will start building up stocks for the September-November festival season, taking advantage of low crude palm oil prices, he added.

About 80 percent of India's total cooking oil imports are palm oils, while the rest are soft oils.



RTRS-UPDATE 5-Argentina hikes biodiesel tax; soy export tax unchanged

BUENOS AIRES, Aug 10 (Reuters) - Argentina tightened its grip on the country's energy sector on Friday by ordering a tax hike on biodiesel exports, a move it said was needed to make domestic fuel prices more affordable, but denied market rumors that it will increase a soybean export tax.

The grains-rich South American country is the world's biggest exporter of biodiesel, a fuel made from soybean oil. The tax, which will go to 32 percent from 20 percent, will go into effect on Saturday, according to a government decree.

The European Union is by far the biggest market for Argentina, which shipped a total of almost 900,000 tonnes of biodiesel in the first half of 2012 for some $1.03 billion, according to industry data.

Government economist Axel Kicillof, who burst onto the national stage when he became the public face of Argentina's nationalization of energy company YPF YPFD.BA in April, justified the tax hike by saying that Argentines are paying more for biodiesel than are foreign buyers.

"This will reduce the domestic price of biodiesel," he told reporters.

Also on Friday the government issued a decree lowering the official price of domestic biodiesel by 15 percent to 4,405 pesos ($0.96) per tonne from 5,195.8 pesos.

"There's not enough demand in the local market to absorb all the biodiesel that's exported," an industry source told Reuters on condition of anonymity. "I think this will end up killing the industry."

Argentine biodiesel production in 2011 was 2.4 million tonnes, of which 1.7 million was exported for about $2.1 billion. The country plans to reach 4.5 million tonnes of annual production by 2013.

Argentine biofuels producers had hoped President Cristina Fernandez would soon raise the compulsory blend requirement for diesel sold domestically to 10 percent from the current 7 percent as a way to boost local demand.

But Kicillof dashed that idea during his comments to reporters. He also dismissed rumors that the government was mulling an increase of export taxes on soybeans, which is currently set at 35 percent.

"This is a better measure than ones that would increase soy export taxes. This is a better way to go," said Kicillof

Chatter about a possible tax hike on international shipments of soy and other raw grains has been in the markets from Chicago to Rosario over the last two weeks, putting downward pressure on prices.

TIGHTER STATE CONTROL

The Fernandez government controls corn and wheat exports through a system of curbs meant to ensure affordable domestic food supplies. The 59-year-old Peronist leader was re-elected last year on promises of increasing the government role in Latin America's No. 3 economy.

The seizure of YPF followed and then a decree was issued last month saying oil companies operating in Argentina must present an annual investment plan. They could face fines or other sanctions, such as the withdrawal of concessions, if they fail to comply.

With its ample water supplies and vast Pampas farm belt, grain powerhouse Argentina is the world's No. 2 corn exporter and No. 3 supplier of soybeans.

But the idle capacity of the country's crushing plants has risen recently due to lower-than-expected soybean output, caused by a drought that hit the Pampas during the 2011/12 growing season.

So, also on Friday, the government lifted a ban on soybean imports, which will now be available to help keep Argentine crushing plants busy.

"We want 100 percent of our biodiesel processing plants to be used by either domestic or imported beans," Kicillof said.

Trader's Highlight

DJI- NEW YORK, Aug 10 (Reuters) - U.S. stocks notched a gain for the sixth session in a row on Friday, while the euro faltered as gloomy Chinese economic data butted up against expectations policymakers could act to shore up the world's economies.

Stock markets' recent rally has been underpinned by comments by European Central Bank President Mario Draghi two weeks ago that the central bank was "ready to do whatever it takes to preserve the euro," raising hopes of heavy bond buying to aid Spain and Italy.

A weaker-than-expected reading in China's July exports on Friday, however, soured the mood and took U.S. stocks lower for most of the day. In addition, new bank loans in China were at a 10-month low, suggesting pro-growth policies have been insufficient and that more urgent action may be needed. The weakness in exports included a 16 percent drop in sales to Europe from a year ago.

"The data from China is concerning because the global economy is still the backdrop for the market. People are still very cautious because of the global growth concerns," said Paul Brigandi, vice president of trading at Direxion Funds in New York.

Some economists said the Chinese central bank could move as early as this weekend to ease policy.

European shares closed lower but Wall Street recovered late in the day in thin trade. The euro headed for its first weekly drop against the dollar and yen in three weeks.

"It makes sense that we'd take a bit of a breather, but momentum has been strong and the fact that we've held steady despite a lack of good news is a good sign the trend will continue," said Joe Bell, senior equity analyst at Schaeffer's Investment Research in Cincinnati.

NYMEX- NEW YORK, Aug 10 (Reuters) - U.S. crude oil futures fell Friday on demand worries, as China's oil imports fell and its total exports were less than expected in July while the International Energy Agency forecast lower growth for oil demand for next year.

For the week, September crude ended higher, gaining for a second straight week. Gasoline futures ended fractionally higher and heating oil dipped 0.8 percent. Both product futures rose for the week, also extending weekly gains to a second in a row.

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade rose for a third day after the U.S. Department of Agriculture slashed its forecasts of U.S. 2012/13 soy production and ending stocks, traders said.

However, the market pared gains by the close as traders booked profits and as corn and wheat futures fell.

Most-active November soybeans SX2 ended up 0.9 percent for the week, the contract's second straight weekly gain and the seventh in eight weeks.

USDA cut its U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.050 billion in July and below trade estimates for 2.817 billion.

USDA lowered its estimate of the U.S. soy yield to 36.1 bushels per acre, below the average trade estimate of 37.8. It projected U.S. soybean harvested area at 74.6 million acres, below the average estimate of 74.8 million.

USDA cut its forecast for U.S. 2012/13 soybean ending stocks to 115 million tonnes, down from 130 million in July but above an average of trade estimates for 112 million. If realized, the stocks-to-use ratio would be 4.19 percent, the lowest since 1964/65.

Continued export demand from China added support. USDA said private exporters sold 290,000 tonnes of U.S. soybeans to China for 2012/13 delivery.

Argentina ordered a tax hike on biodiesel exports, a move it said was needed to make domestic fuel prices more affordable, but denied market rumors that it will increase a soybean export tax.

FCPO- SINGAPORE, Aug 10 (Reuters) - Malaysian crude palm oil futures ended off an 8-week low on Friday, and posted a fifth straight weekly loss with traders positioning ahead of a key report by the U.S. Department of Agriculture (USDA) later in the day.

Palm oil initially went to its lowest since June 15 after cargo surveyor Intertek Testing Services reported a 1.8 percent fall in exports for the first ten days of August from a month ago. PALM/ITS

But prices pulled back on short-covering ahead of USDA's monthly supply and demand report at 1230 GMT that is likely to show a tighter soy output and squeeze soybean oil supply, shifting some demand to palm oil.

"The USDA report tonight is the most important. If it is bearish, we will see palm oil go down fast to 2,700 and 2,600 ringgit. If it is bullish, it will try to crawl above 3,000 ringgit," said a Malaysian planter.

"People will be watching Olympics but I will be watching the USDA report."

At closing, the benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange edged up 0.6 percent to 2,882 ringgit ($925) per tonne. Prices touched a low of 2,844 ringgit, a level last seen on June 15.

Palm oil ended the week 1.2 percent lower, the fifth consecutive week that the edible oil is in the red.

Total traded volumes were high at 28,005 lots of 25 tonnes each on short-covering, compared to the usual 25,000 lots.

REGIONAL EQUITY- Aug 10 (Reuters) - Southeast Asian stock markets ended mostly firmer on Friday, with Indonesia near a three-month high led by financials and on large foreign inflows. Thailand advanced for a fifth straight session.

The region's markets were down in early trade due to weak Chinese trade data for July, but recouped losses later in the day.

Jakarta's Composite Index .JKSE nudged up 0.25 percent, led by a 2.1 percent gain in Bank Rakyat Indonesia Tbk BBRI.JK. The index hit near its highest level since May 9 fed by a net foreign inflow of $70.59 million.

Thailand's top oil firm PTT PTT.BK, with a 1.8 percent gain, helped Thai SET index .SETI add 0.14 percent to close at its highest since July 18.

Singapore's Straits Times Index .FTSTI ended 0.1 percent firmer.

Malaysia .KLSE rose 0.2 percent while the Philippine index .PSI finished 0.1 percent stronger.