India's June vegoil imports fall sixth straight month.

(Reuters) - India's vegetable oil imports fell an annual 6 percent in June, dropping for the six straight month but not as sharply as market expectations as farmers held back oilseed sales anticipating higher prices later.

Traders in the world's biggest importer of edible oils had expected an 18 percent fall in the overseas purchases of vegetable oils in June.

June imports dropped to 732,232 tonnes from 780,679 tonnes a year earlier, trade body Solvent Extractors' Association said in a statement on Wednesday.

But June imports were higher than May as importers speeded up purchases ahead of the festival season.

Traders said many farmers had held back oilseed stocks last month as weak monsoon rains in the middle of June had raised prospects of higher oilseed prices.

Analysts and traders said in May that Indian farmers were holding huge stocks of oilseeds, which would be sold in the months ahead, increasing domestic output of vegetable oils and reducing imports.

India's festival season starts in August with the Muslim holy month of Ramadan and ends with the Hindu festival of Diwali in November.

Palm oil imports rose 24 percent in June in comparison to the previous month, while last month's soyoil imports were higher by 75 percent than purchases in May.

The higher monthly imports in May pushed stocks at various ports and refineries at the start of last month to 1.1 million tonnes, up 3 percent from the previous month.

Festive season buying from India may support the benchmark September contract on Bursa Malaysia's Derivatives Exchange that rose 20 ringgit on Wednesday to a two week high level to 2,373 ringgit ($743) a tonne.

A Reuters poll has forecast average palm oil futures to stay unchanged in the second half of this year and in 2011 at 2,500 ringgit a tonne as ample supplies of rival soyoil cap demand.

India buys mainly palm oil from Indonesia and Malaysia and a small quantity of soyoil from Argentina and Brazil.

Last month's vegetable imports were higher than the trade expectation as the highest imports of soyoil since the start of the season in November took place as the landed cost with rival palm oil reduced to $40-55 per tonne in the last two months, the trade body said.

India's soyoil imports have been rising since April after China, the world's top soyoil importer, halted shipments in March from Argentina, the world's biggest exporter, in retaliation for anti-dumping steps the South American country imposed on some Chinese manufactured goods.

The country's vegetable oil imports for the first eight month of the current year fell by 4 percent to 5.6 million tonnes.

Source : Reuters