India, the world's top edible oil buyer, is likely to cut purchases by about 10 percent from a year ago in the quarter ending in April as a bumper summer crop is seen lifting domestic supplies, traders said on Thursday.
The country, which imports nearly half of its oil needs, mainly from Malaysia, Indonesia, Argentina and Brazil, is expected to buy 1.03 million tonnes in the April quarter, down from 1.14 million tonnes in the year-ago period, they said.
"Domestic oil supply will gradually rise from the next month," Sandeep Bajoria, chairman of the Central Organisation for Oil Industry and Trade said. "Farmers are set to begin harvesting the summer oilseeds crop, which has been shaping very well."
Local supplies would rise to about 590,000 tonnes in March and 670,000 tonnes in April, from 370,000 tonnes and 390,000 tonnes in the respective months of the previous year, he said.
The summer oilseeds output is likely to surge 47 percent from a year ago to 9.05 million tonnes in the year to October 2004 as farmers had good soil moisture at the time of sowing in November and December following excellent monsoon rains.
India, with a population of more than one billion people, is expected to import 325,000 tonnes of oils in February and 350,000 tonnes each in March and April. It bought 204,600 tonnes, 428,800 tonnes and 510,000 tonnes respectively in the corresponding months of 2003, traders said.
The country's oil imports rose 24 percent from the previous year to about 360,000 tonnes in January, including 177,000 tonnes of crude palm oil, 113,000 tonnes of RBD palm olein and 35,000 tonnes of crude soyaoil, they said.
India's oil imports are expected to drop by 17.7 percent from a year earlier to 4.2 million tonnes in 2003/04, traders said.
There has been no rush to book new import contracts as buyers brought enough volumes in January, traders said, adding edible oil stocks in the country were comfortable.
India was not entering into deals to import soyaoil from South America because of firm prices. Only about 30,000 tonnes of soyaoil are likely to arrive this month, against an average of about 80,000 tonnes.
"In the next couple of months, we have to consume mainly palm oils and locally-produced oils," said a trader with a global firm.
Landed costs of crude soyaoil at Indian ports have been ruling at about 44,700 rupees ($987) a tonne, about 4,500 rupees more than prices of crude palm oil.
"Generally, Indians are willing to pay a premium of about 2,000 rupees a tonne for soyaoil, but the current gap is too much," said an edible oil broker.
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