RTRS - India's 2012 and 2013 palm oil imports seen up 17 pct

MUMBAI, March 25 (Reuters) - India's imports of palm oil could rise more than 17 percent in the year to October 2013 to stand at 9 million tonnes, as the edible oil is the cheapest available, despite an import duty, the country's top importer of edible oils said on Monday.

The rise in imports by the south Asian country, the world's biggest importer of edible oil, would help top producers Indonesia and Malaysia reduce bulging palm oil stocks and so support prices that dropped 23 percent last year.

"No other local oil is as cheap as imported palm oil," Dinesh Shahra, the managing director of Ruchi Soya, , told Reuters in an interview. "Vegetable oil demand is growing in India."

India is likely to buy 9 million tonnes of palm oil overseas in 2012/13, including 1.5 million tonnes of refined palm oil. It imported 7.67 million tonnes of palm oil in 2011/12.

Growing refining capacity in Indonesia, the world’s biggest palm oil producer, would boost supplies of refined edible oil, boosting India’s imports of the refined variety in the next few months and threatening domestic refiners, Shahra said.

"Because of the narrow spread between crude and refined oil, together with a 5 percent duty differential, refined palm oil has been coming into India," he said.

India slapped a duty of 2.5 percent on imports of crude edible oils in January, reducing to 5 percent from 7.5 percent the difference in the duty on the two varieties.

The gap between the landed cost of refined and crude palm oil has fallen to $20 per tonne from more than $70 in December, prompting importers to opt for the refined grade, Shahra said.

Indian edible oil refiners have consistently asked the government to raise the import duty on crude palm oil to 10 percent and refined oil to 20 percent, to protect the domestic industry.

In the first four months of the marketing year that started on November 1, India’s edible oil imports jumped 21.4 percent to 3.65 million tonnes, due to a surge in palm oil imports by a quarter.

Indians use vegetable oils to cook most of their famed curries. The country's rising prosperity and growing population have continually drive up its edible oil needs, even as domestic supply remains stagnant.

"India will be a 20-million-tonne vegetable oil economy in the coming 5 years, with local production of 6 million tonnes and imports of 14 million tonnes," Shahra said.

India’s imports of edible oil in the current marketing year are likely to rise to 11 million tonnes, from nearly 10 million a year ago, he said.

India mainly buys palm oils from Indonesia and Malaysia, and a small quantity of soyoil from Brazil and Indonesia.

Ruchi Soya has also been raising imports of palm oil to retain and increase market share, Shahra said, but gave no estimate of its imports for the current year.

Trader's highlight

DJI - NEW YORK, March 25 (Reuters) - U.S. stocks fell on Monday on renewed concerns about the developments in Cyprus and the euro zone, which wiped away earlier gains that drove the S&P 500 index to less than a point away from its record close.

Stocks fell after Jeroen Dijsselbloem, who heads the Eurogroup of euro-zone finance ministers, told Reuters and the Financial Times that when failing banks need rescuing, euro-zone officials would turn to the bank's shareholders, bondholders and uninsured depositors to contribute to their recapitalization.

He also said that Cyprus was a template for handling the region's other debt-strapped countries.

But stocks came off their lows after Dijsselbloem clarified his previous comments and said, "Cyprus is a specific case with exceptional challenges, which required the bail-in measures we have agreed upon yesterday. Macro-economic adjustment programmes are tailor-made to the situation of the country concerned and no models or templates are used."

Before his remarks, the Dow industrials hit yet another record intraday high and the S&P 500 edged closer to its highest closing level ever on Monday after negotiators reached a deal to keep Cyprus afloat with a financial bailout and avert the country's possible exit from the euro zone.

"There was certainly a sigh of relief that a deal was reached, but there are still growing concerns that more work needs to be done," said Jack Ablin, the chief investment officer of BMO Private Bank in Chicago.

Banking shares were among the day's top decliners. Shares of Morgan Stanley fell 1 percent to $21.97 while Bank of America dropped 1.3 percent to $12.40.

The Dow Jones industrial average slipped 64.28 points, or 0.44 percent, to end at 14,447.75. The Standard & Poor's 500 Index dipped 5.20 points, or 0.33 percent, to 1,551.69. The Nasdaq Composite Index declined 9.70 points, or 0.30 percent, to close at 3,235.30.

Oils - NEW YORK, March 25 (Reuters) - Crude oil futures rose on Monday in choppy trading after a bailout deal for Cyprus improved the outlook for fuel demand in the euro zone.

Brent price gains were curbed by caution about the Cyprus bailout and Europe's economy, while U.S. crude prices rose more than 1 percent and narrowed the spread between the two contracts to less than $13 a barrel during the session.

Cyprus reached a deal with international lenders early on Monday, agreeing to shut down its second-largest bank and inflict heavy losses on big depositors in return for a 10 billion euro ($13 billion) bailout.

Brent May crude rose 51 cents to settle at $108.17 a barrel, having traded from $106.80 to $109.07.

U.S. May crude rose $1.10 to settle at $94.81 a barrel, above the 50-day moving average at $94.38 and having reached $95.65 during the session.

Brent's premium to U.S. crude ended lower at $13.36 a barrel based on settlements. The spread narrowed to $12.85 during the session, the narrowest since early July.

Brent briefly turned lower and then seesawed after comments from the chief of the Eurogroup of euro zone finance ministers dampened investor enthusiasm that had pushed oil and share prices higher after the deal to help Cyprus.

The rescue agreed for Cyprus represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors, Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup, said.

"The relief at the fact that Cyprus will not suffer an uncontrolled bankruptcy and have to leave the euro zone may prompt financial investors to increase their long positions in crude oil," analysts at Commerzbank said in a note.

While the deal removed the immediate risk of financial meltdown in Cyprus and its possible exit from the euro zone, concerns persisted about the Mediterranean island and the euro zone economy as a whole.

"The deal puts the fire out for now. The question is whether it is sustainable," said Thorbjorn Bak Jensen, an analyst at AS Global Risk Management in Copenhagen.

"The story is not finished yet; there will still need to be more haircuts ... The positive is that something has been agreed on, but there is still some time to go."

Saudi Arabia's oil minister, Ali al-Naimi, said on Monday that an oil price around $100 a barrel was reasonable for consumers and producers, highlighting the top crude exporter's preferred range.

Brent prices in mid-February pushed above $119 a barrel to its highest level this year, before pulling back on economic concerns and improving North Sea supply.

Middle East tensions, including the civil war in Syria and Iran's dispute with the West over Tehran's nuclear program, continue to support oil prices.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell for a second straight session on position-squaring ahead of U.S. government reports this week on old-crop stocks and 2013 U.S. plantings, traders said.

* Nearby soybean and soymeal contracts lost ground against deferred contracts on spreads.

 

·         Trade expects USDA's planting intentions report on  Thursday to project U.S. soybean plantings at a record-high 78.4   million acres. 

·         Trade expects USDA to report U.S. March 1 soybean stocks   on Thursday at 935 million bushels, the lowest level in nine  years.

 

·         USDA said private exporters reported sales of 234,000  tonnes of U.S. soybeans to China for delivery in 2013/14.

·         USDA reported export inspections of U.S. soybeans in the  latest week at 18.458 million bushels, above trade expectations  for 11 million to 14 million.

·         Brazil's soybean harvest was 60 percent complete as of   Friday, up from 54 percent the previous week and in line with  the year-ago figure of 61 percent, agriculture consultancy AgRural said. However, rains have slowed progress and threatened  crop quality. 

 

·         Egypt's Meditrade issued an international tender to purchase up to 12,000 tonnes of soyoil and 12,000 tonnes of sunflower oil, European traders said. 

BMD CPO - SINGAPORE, March 25 (Reuters) - Malaysian palm oil futures fell on Monday on weaker exports, although losses were limited as a last-ditch deal to bailout Cyprus supported investor appetite for riskier assets.

Cyprus clinched a deal with international lenders for a 10 billion euro ($13 billion) bailout, sending global markets including crude oil and the euro higher.

But palm oil came under pressure as Malaysian exports fell to 1,055,914 tonnes in the first 25 days of the month, a 7 percent slide compared to the same period last month.

Data from cargo surveyors also showed a slowdown of shipments to major edible oil buyers India, the United States and the European Union.

"We saw a drop in exports to India ... Indian buyers last month did not book that many shipments for March in advance on uncertainty of the tax change," said a Singapore-based trader with a global commodities house.

Indian buyers avoided booking cargoes for March in advance as they expected the government to use its budget in late February to announce a hike in import tariffs, although that did not materialise.

The benchmark June contract on the Bursa Malaysia Derivatives Exchange had lost 1.3 percent to 2,460 ringgit ($794) per tonne by Monday's close. Intraday prices touched a high of 2,505 ringgit, the highest level since Feb. 22, but failed to rally.

Total traded volume stood at 35,577 lots of 25 tonnes each, much higher than the usual 25,000 lots.

Leading analyst Dorab Mistry has forecast palm oil futures could trade between 2,400 and 2,700 ringgit per tonne by the end of May due to lower stocks and output, an upward revision from his previous forecast.

He also expects Malaysian palm oil stocks to drop below 2 million tonnes in June.

"We generally agree with Dorab Mistry’s short-term view ... However, we do not think Malaysia palm oil inventory will reach 2 million tonnes as we believe it should reach the lowest level of 2.27 million tonnes by April 2013," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note to clients.

Palm oil stocks in Malaysia, the world's second-largest palm producer, stood at 2.44 million tonnes in end-February and traders are counting on seasonally slower production and healthy demand to bring stocks down.

In other markets, Brent rose above $108 on Monday, as hopes brightened for a revival in demand after euro zone ministers approved an EU-IMF plan for restructuring Cyprus's banking sector, averting a worsening crisis for the region.

In other vegetable oil markets, U.S. soyoil for May delivery edged down 0.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent.

Regional Equities - BANGKOK, March 25 (Reuters) - Thai stocks rose 3 percent on Monday as Southeast Asia stock markets followed gains in larger regional markets after Cyprus and the European Union agreed on a plan to tackle the island's financial crisis.

Most markets in the region had slipped into negative territory last week due to the Cyprus crisis. Large-cap stocks, which were under heavy selling pressure last week, broadly rebounded on Monday.

Bangkok's SET index closed at 1,523.95, paring most of Friday 3.3 percent drop, led by a 2.8 percent gain in banking shares after Friday's 2.5 percent loss. 

"We believe the current sell-off is a great buying opportunity for blue chips as investors are likely to focus more on fundamentals after this," CIMB Securities (Thailand) said in a research note.

The Philippines climbed 1.21 percent to 6,597.59, Indonesia rose 1.2 percent to 4,777.90 while Malaysia gained 1 percent to 1,643.89 as foreign investors bought shares worth 326 million ringgit ($105 million), stock exchange data showed.