India's palm oil imports are likely to climb around 4 percent to 8.25 million tonnes in the marketing year starting November as poor monsoon rains curb growth in local edible oil supplies amid a rise in consumption, a veteran trader said on Friday. Higher purchases by India, the world's top importer of cooking oils, could support benchmark Malaysian palm oil futures that hit a five-year low earlier this month and have shed almost a fifth of their value so far in 2014.
"Edible oil consumption is likely to rise to a record 19.3 million tonnes next year, even with conservative estimates for growth in demand," said Govindbhai Patel, an influential trade expert and managing director at GG Patel & Nihil Research Co. "Considering consumption growth, we need to import 12.1 million tonnes of edible oils next year," Patel said in a speech at an industry conference in Mumbai. Nearly 60 percent of India's annual edible oil demand is met by imports, mainly of palm oil sourced from Indonesia and Malaysia.
India also buys tiny amounts of soyaoil from Latin America and sunflower oil from the Black Sea region. Next year India's imports of soyaoil and sunflower oil could rise marginally to 2 million tonnes and 1.6 million tonnes respectively, Patel said. For the current year, India's total edible oil imports have been estimated at 11.6 million tonnes. India's vegetable oil imports typically peak between August and October when Indians celebrate a number of festivals during which consumption of fried and calorie-laden food rises.
"Poor rainfall affected sowing of groundnut and soyabean," said Patel, who has been trading vegetable oils for more than four decades. The area of land cultivated with soyabeans and groundnut, key summer-sown crops, fell this year due to an 11-percent drop in rainfall since the start of the monsoon season on June 1. Indian farmers plant soyabean in the rainy months of June and July, with harvests from October. Rapeseed, the main winter oilseed crop, is sown from October and harvested from March. The South Asian country's edible oil output is likely to rise by just 2.1 percent to 7.2 million tonnes in 2014/15, Patel said.