Search the Internet          Tips  Sites: Finance, Investment

Edible oil imports seen up 11.5%

India's edible oil imports are expected to rise by 11.5 per cent in the year to end-October to offset falling domestic output and meet the needs of the country's growing population, an Indian refiner said on Tuesday.

India's edible oil imports are projected to rise to 5.35 million tonnes for the 2000-01 (November-October) year compared with 4.80 million tonnes a year earlier, said Govind Ambady, vice-president, commodity sourcing and exports, at Agro Tech Foods Ltd.

But the share of palm oil in total edible oil imports is likely to drop to between 67 per cent and 72 per cent, hit by a recent hike in import duties, he told a news conference.

In the year ended October 2000, palm oil accounted for 73 per cent of total edible oil imports.

Imports of RBD palmolein are expected to drop to 2.1 million tonnes in the current year from 2.5 million last year, but crude palm oil imports are likely to rise to 1.5 million from 0.8 million, Ambady said.

In February, India slapped its heaviest-ever import duty of 75 per cent on crude palm oil and 85 per cent on refined palm oil while keeping duties on soyoil, a competing oil, at a lower 45 per cent.

The hike by India, the world's top edible oil buyer, has triggered recent concerns of a drop in palm oil imports, hurting prices of the commodity.

At the midday break, Malaysia's benchmark third-month July futures contract was down 4 ringgit at 756 ringgit a tonne -- its lowest in over 2-½ months.

But Ambady said despite higher duties, palm oil is still the preferred oil in most parts of India.

Demand for palm oil will continue to grow, he said.

"Despite the duty, Malaysia will continue to be a key exporter to India because of the shorter transit time and because it's a refined oil and it offers very competitive prices," said Ambady who accompanied Indian Prime Minister Atal Bihari Vajpayee on a visit to Malaysia.

Kuala Lumpur said on Monday it had not been able to convince New Delhi to cut back on its import duty for palm oil but said it had secured a promise for a review.

India currently takes up 23 per cent of world palm oil imports.

India is expected to remain as a net edible oil importer because of declining yield of domestic oilseeds and a growing population, Ambady said.

"We seriously doubt we can turn into a (net) exporter or a neutral country," he said.

India's per capita consumption of edible oils is currently at 11.8 kg per annum, well below the world average of 18 kg, suggesting there is still room for growth, he said.

Tell us what you think of this report