Oil consumption likely to rise

India's imports of edible oil for October 2003-September 2004 will be marginally lower at 5.53 million tonnes than the 5.56 million tonnes India imported in October 2002-September 2003, Thomas Mielke, director of Ista Mielke GmbH, which publishes Oil World magazine from Hamburg, Germany, said at Globoil 2003 conference in Powai in Mumbai on Sunday.

Mielke said India's import of edible oils is not expected to fall substantially despite the rise in oils production owing to higher consumption in the October 2003-September 2004 period.

Good monsoon rains in India will boost farm production and incomes of farmers in the October 2003-September 2004 period, which can lead to higher consumption of edible oils, especially in the rural sector, Mielke said.

India's production of edible oils for the period of October 2003-September 2004 is likely to hit 7.37 million tonnes, higher than the 6.22 million tonnes in the October 2002-September 2003 period, said Mielke.

India's oil marketing year runs from November to October, though Oil World considers the September-October period for forecasting edible oil production around the world.

Oil World's forecast of 5.53 million tonnes of edible oil imports for the September 2003-October 2004 period is much higher than the Indian trade estimates of 4 million-4.5 million tonnes of edible oil production in November 2003-October 2004.

Mielke said global prices of oilseeds would probably rise from November 2003 up to January 2004. He added the prices of oilseeds would be on the upswing owing to a fall in supply.

He said bearish factors might dominate oil and fat prices in October-December 2003. "Dry conditions in July and August have resulted in substantial damage to the US soybean crop," said Mielke.

The US is the largest soybean producer in the world. He added bullish factors may return in January-March 2004, as world production and stock of oils, especially palm oil, are expected to decline in this period owing to seasonal reasons.

Commenting on China, the world's other biggest oil consumer, Mielke said that it's edible oil production is expected to hit 17.19 million tonnes in October 2003-September 2004, higher than the 16.23 million tonnes it produced in October 2002-September 2003.

He said China's imports would increase to 5.58 million tonnes in October 2003-September 2004 from 5.34 million tonnes in the October 2002-September 2003 period.

"China will step up imports of oils and fats in the October 2003-September 2004 period by 4-5 per cent to satisfy demand growth," said Mielke.

Production of palm oil globally in October 2003-September 2004 will be 28.09 million tonnes, up from 27.10 million tonnes in 2002-2003, Mielke said.

Globally, the total edible oils production will be around 128.35 million tonnes in the October 2003-September 2004 period, higher than the 122.78 million tonnes in the October 2002-September 2003 period, he added.