MUMBAI, Sept 28 (Reuters) - India’s palm oil imports are likely to rise 6.2 percent to a record 9.6 million tonnes in the year starting November, as the first back-to-back drought in three decades restricts supplies amid a rise in consumption, a veteran trader said on Monday.
Higher purchases by the world’s top importer of cooking oils could support benchmark Malaysian palm oil futures that have rebounded nearly a quarter since falling to the lowest level in six and a half years on August 25.
“Considering the marginal rise in the domestic production and much higher rise in consumption, our edible oil import requirement will increase to 14.85 million tonnes in 2015/16,” said Govindbhai Patel, an influential trade expert and managing director at GG Patel & Nihil Research Co.
Nearly 70 percent of India’s annual edible oil demand is met by imports, mainly of palm oil sourced from Indonesia and Malaysia. It also buys soyoil from Latin America and sunflower oil from the Black Sea region.
India’s soyoil imports are likely to rise 18 percent to a record 3.55 million tonnes as discount of palm oil over soyoil has been narrowing due to concerns over the output of the tropical oil, he said in a presentation at an edible oil conference in Mumbai.
Sunflower oil imports during the period could drop 4 percent to 1.45 million tonnes as it’s premium over rival soyoil has risen, he added.
In the past 20 years, India’s edible oil output has risen only about a third, whereas imports have surged 12 times to nearly 15 million tonnes to keep pace with growing consumption, making it the world’s top buyer of cooking oils.
“Despite an increase in area, our soybean production is likely to remain unchanged from the previous year at 8.5 million tonnes,” he said.
Soybean is the main summer-sown oilseed in India.
Ample rains in June helped farmers expand areas under soybean, but excessive rains in July and August hit crops in the top producing central state of Madhya Pradesh, while a prolonged dry spell trimmed yields in second biggest producer Maharashtra.
Production of summer-sown groundnut, another key oilseed, is likely drop 12.7 percent from a year ago to 3.1 million tonnes due to reduction in acreage and poor rainfall, he said.
Rains were 14 percent below average so far over the four-month monsoon season that ends this month due to an El Nino weather pattern, which can lead to scorching weather across Asia and east Africa but heavy rains and floods in South America.
Anticipating higher production of winter-sown rapeseed, Patel forecast a marginal 2 percent rise in the South Asian country’s edible oil output in 2015/16 to 6.26 million tonnes.
“As farmers have realised excellent prices for last year’s rapeseed crop, it is likely that the area will increase substantially and rainfall in last fortnight of September will prove supportive for the crop’s sowing,” he said. (Editing by Michael Perry)