India Edible Oil Imports May Rise on Reduced Planting (Update1) By Pratik Parija
Jan. 24 (Bloomberg) -- India's edible oil imports may rise this year after dry weather curbed winter planting of oilseeds and higher prices encouraged farmers to shift to wheat and barley. Overseas purchases may increase 15 percent to as much as 5.4 million metric tons in the year ending October from 4.7 million tons a year earlier, according to six traders and analysts surveyed by Bloomberg News. India is the world's biggest buyer of vegetable oils after China, with almost half of its consumption in the form of palm oil and soybean oil. Increased imports may further deplete global stockpiles of palm oil, supporting prices that have risen 63 percent in the past year. The South Asian country will increase its edible oil imports at a time when there's going to be a shortage in supplies of oilseeds globally, Amol Tilak, an analyst at Kotak Commodity Services Ltd., said by phone from Mumbai yesterday. ``Palm oil will get support as that's the cheapest commodity available,'' he said, adding that China also plans to buy more. Rising incomes are boosting demand for fried food in China and India, while vegetable oils are also sought for use in biofuels. Palm oil stockpiles in Malaysia dropped 7 percent in December from November after production slumped. Indonesia and Malaysia control 90 percent of global output of palm oil. The shift to wheat and barley comes largely at the expense of mustard seed planting. Farmers are seeking to benefit from grain prices that have soared on higher consumption of cakes, bread, biscuits and beer among Indians. Mustard oil is the third-most used cooking oil in India and accounts for more than 70 percent of the nation's output of winter-sown oilseeds. Mustard output may fall as low as 5 million tons from 6.22 million tons, Govindlal G. Patel, director of Dipak Enterprises, said Jan. 22. Patel has been trading cooking oils for more than three decades. To contact the reporter on this story: Pratik Parija in New Delhi at [EMAIL PROTECTED] *Last Updated: January 23, 2008 20:09 EST*
