MUMBAI, March 25 (Reuters) - India's imports of palm oil
could rise more than 17 percent in the year to October 2013 to stand at 9
million tonnes, as the edible oil is the cheapest available, despite an import
duty, the country's top importer of edible oils said on Monday.
The rise in imports by the south Asian country, the world's
biggest importer of edible oil, would help top producers Indonesia and Malaysia
reduce bulging palm oil stocks and so support prices that dropped 23
percent last year.
"No other local oil is as cheap as imported palm
oil," Dinesh Shahra, the managing director of Ruchi Soya, , told Reuters
in an interview. "Vegetable oil demand is growing in India."
India is likely to buy 9 million tonnes of palm oil
overseas in 2012/13, including 1.5 million tonnes of refined palm oil. It
imported 7.67 million tonnes of palm oil in 2011/12.
Growing refining capacity in Indonesia, the world’s biggest
palm oil producer, would boost supplies of refined edible oil, boosting India’s
imports of the refined variety in the next few months and threatening domestic
refiners, Shahra said.
"Because of the narrow spread between crude and
refined oil, together with a 5 percent duty differential, refined palm oil has
been coming into India," he said.
India slapped a duty of 2.5 percent on imports of crude
edible oils in January, reducing to 5 percent from 7.5 percent the difference
in the duty on the two varieties.
The gap between the landed cost of refined and crude palm
oil has fallen to $20 per tonne from more than $70 in December, prompting
importers to opt for the refined grade, Shahra said.
Indian edible oil refiners have consistently asked the
government to raise the import duty on crude palm oil to 10 percent and refined
oil to 20 percent, to protect the domestic industry.
In the first four months of the marketing year that started
on November 1, India’s edible oil imports jumped 21.4 percent to 3.65 million
tonnes, due to a surge in palm oil imports by a quarter.
Indians use vegetable oils to cook most of their famed
curries. The country's rising prosperity and growing population have
continually drive up its edible oil needs, even as domestic supply remains
stagnant.
"India will be a 20-million-tonne vegetable oil
economy in the coming 5 years, with local production of 6 million tonnes and
imports of 14 million tonnes," Shahra said.
India’s imports of edible oil in the current marketing year
are likely to rise to 11 million tonnes, from nearly 10 million a year ago, he
said.
India mainly buys palm oils from Indonesia and Malaysia,
and a small quantity of soyoil from Brazil and Indonesia.
Ruchi Soya has also been raising imports of palm oil to
retain and increase market share, Shahra said, but gave no estimate of its
imports for the current year.
