NEW DELHI/MUMBAI, Sept 24 (Reuters) - India’s overseas purchases of edible oil in the year starting November are set to surge to a record 13 million tonnes, an executive at key importer Ruchi Soya said, as lower prices, rising population and higher incomes boost consumption.
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.
Of the estimated total 2014/15 Indian imports, more than 9 million tonnes will be palm oil, Dinesh Shahra, managing director of Ruchi Soya Industries Ltd, India’s biggest edible oil buyer, told Reuters in an interview on Wednesday.
In the current year, edible oil imports are pegged at 11.6 million tonnes, including 8 million tonnes of palm oil, he said.
India imported a record 10.4 million tonnes of edible oils in the 2012/13 year, data from Mumbai-based industry body Solvent Extractors’ Association of India (SEA) showed.
Rising population, increasing prosperity and less-than-satisfactory monsoon rains would boost next year’s edible oil imports, B. V. Mehta, executive director of the SEA said ahead of a global vegetable oils conference starting Friday.
“Our per capita consumption is going up by 3-4 percent every year and our population is expanding at 22 million every year. That in itself leads to an increase of 300,000 tonnes in vegetable oils consumption,” Mehta said.
Area under soybean 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 soybean 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.
Nearly 60 percent of India’s annual edible oil demand of 18-19 million tonnes is met by imports, consisting mainly of palm oil sourced from Indonesia and Malaysia.
India also buys tiny amounts of soyoil from Latin America and sunflower oil from the Black Sea region.
India’s sunflower oil imports in the current year to October are likely to rise to a record 1.55 million tonnes as its premium over palm oil dropped sharply, Shahra said.
“Sunflower oil market in India has been growing magnificently owing to growing income levels, increasing spending, better living standards and growing health consciousness among Indian consumers,” he said.
Shahra estimated next year’s sunflower imports could climb further to 1.65 million tonnes.
The price gap between crude sunflower oil and crude palm oil narrowed to $95 per tonne in August, compared with $262 a year ago, according to data compiled by the SEA.
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.
The country’s vegetable oil imports in August touched a record 1.3 million tonnes due to the highest ever soyoil imports on expectations of a poor soybean harvest.
The only redeeming feature in these buoyant import estimates for 2014/15 is the fact that India has a good deal of unused carryover oilseeds stocks from the 2013/14 season, said Govindbhai Patel, a widely respected trade expert and managing director at GG Patel & Nihil Research Co.
“These stocks will somehow cap or limit our import requirements for the next year,” said Patel, who has been trading vegetable oils for more than four decades now. (Editing by Himani Sarkar)