India’s Edible Oil Imports Surge as Prices Decline (Update1)

Feb. 12 (Bloomberg) -- India, the world’s biggest buyer of vegetable oils after China, imported 87 percent more cooking oil last month after a decline in palm oil prices boosted demand.

Edible oil purchases in January were 856,690 tons, up from 457,601 tons a year ago, the Solvent Extractors’ Association of India said in a statement today. Imports in the three months to January almost doubled to 2.09 million tons from a year ago.

Increased purchases may help support palm oil prices that slumped 44 percent last year in Malaysia, the world’s second- biggest producer. Imports may climb to as much as 6.5 million metric tons from 5.7 million tons a year ago, Govindlal G. Patel, director of Dipak Enterprises, said yesterday.

Palm oil futures for April delivery climbed as much as 1 percent to 1,945 ringgit ($538) a ton in Kuala Lumpur. Futures were at 1,934 ringgit at 4 p.m. local time.

India bought more palm oil in anticipation of an increase in the import tax and lower edible oil prices, the association said. Purchases in January totaled 703,515 tons, taking the season’s total to 1.84 million tons, or 88 percent of the total.

The country won’t impose a tax on crude palm oil imports as prices of domestic oilseeds are above the assured rates paid to farmers by the government, Farm Minister Sharad Pawar said last month. India imposed a 20 percent import duty on crude soybean oil in November to shield oilseed growers from purchases made at zero duty. No duty was levied on crude palm oil.

Sunflower Oil

Vegetable oil imports, including the non-edible grades, were 912,342 tons in January, the highest since India freed imports in 1994, the association said today. Purchases between November and January jumped 78 percent to 2.2 million tons.

India bought 124,118 tons of sunflower oil in November-to- January period after the commodity cheaper than soybean oil, the extractors’ group said. The nation also imported 1,914 tons of rapeseed oil for the first time since the 2002-03 season.

India relies on overseas purchases to meet almost half its edible-oil demand. It buys palm oil from Indonesia and Malaysia, and soybean oil from Argentina and Brazil.