NEW DELHI, June 14 (Reuters) - India's refined palm oil imports surged 70 percent in May as worries about a hike in duties receded, prices fell and demand picked up ahead of the Ramadan festival in July, a top trade body said on Thursday.
India is the world's No. 1 importer of vegetable oils, covering about half its annual demand of 15 million to 16 million tonnes through imports. Much of its palm oil comes from Indonesia, which is promoting a move to refined oil to support its refiners.
India's imports of refined palm oil surged to 165,426 tonnes in May from 97,547 tonnes in April, the Solvent Extractors' Association of India (SEA) said, higher than average expectations in a Reuters poll but within forecast ranges. [ID:nL3E8HA05C]
India's refined oil imports have been on a generally rising trend since October 2011, when Indonesia, the world's top palm oil producer, altered taxes to make its refined palm oil more attractive than the crude variety.
"The current duty structure favours more exports of refined oil from Indonesia than crude oil," B. V. Mehta, executive director of SEA, told Reuters.
Indian refiners' calls on the government for retaliatory action, after the Indonesian move reined in domestic refining and put many plants in India on the verge of closure, have so far proved fruitless because food inflation is high. [ID:nL4E8E51LY]
Expectations the government would hike import taxes in its March budget or soon after deterred buyers of imported refined palm oil in March and April.
In the first seven months of the current year from November, India's refined palm oil imports rose to 1.1 million tonnes, a jump of 98 percent from the year-ago period.
Mehta said refined palm oil imports would continue to be higher than the average 2011 monthly levels of 90,000-100,000 tonnes if the government does not restrict purchases by raising the import duty.
Cheaper prices also encouraged buying in May, with imported refined palm oil $106 per tonne cheaper than in April, the trade data showed.
Total vegetable oil imports in May fell 3.1 percent to 896,921 tonnes due to a decline in the purchase of soft oils such as soyoil and sunflower oils after stocks were built up in April.
