Palm, Soybean Oils Imports by India to Reach Record as Economy Accelerates.

India, the top buyer of vegetable oils after China, may import a record quantity of soybean and palm oils for a fourth year as growing population and incomes increase demand for processed foods, a processors’ group said.

Purchases may climb to 9.5 million metric tons in the year starting Nov. 1, compared with 9 million tons this season, Ashok Sethia, president of the Solvent Extractors’ Association of India, said in a phone interview from Kolkata today.

Higher Indian imports will help support a rally in palm oil prices in Kuala Lumpur that have advanced 19 percent from near an eight-month low in July. The Asian nation overtook China last year as the biggest buyer of the tropical commodity.

“Imports will need to increase by a minimum 4 to 5 percent annually to meet demand from a growing population in a booming economy,” said Sethia, who is due to speak at a three-day event in Mumbai starting Sept. 24. “Purchases can be more or less depending on prices and the local oilseed crops.”

The December-delivery contract lost as much as 1 percent to 2,680 ringgit a ton ($864) on the Malaysia Derivatives Exchange and traded at 2,686 ringgit at 3:08 p.m. in Mumbai. Futures rose to the highest level in more than a month yesterday.

Imports by India surged 64 percent to a record 1.07 million tons in August from 650,603 tons a year earlier, the association said Sept. 14. Purchases in the November-August period climbed 5 percent to 7.45 million tons from a year ago, it said.

The country, which relies on imports to meet almost half its annual cooking fat demand, buys palm oil from Indonesia and Malaysia, and soybean oil from Argentina and Brazil.

‘Excellent Condition’

Incoming shipments may slow in the next three months as growers gather soybean and peanuts crops. The crops are in an “excellent” condition because of above-average rain, Sethia said. High soil moisture will aid the planting of canola crop starting next month, he said.

India’s June-September monsoon has been 104 percent of the 50-year average, raising water levels in 81 major dams to 125 percent of last year on Sept. 16, the Central Water Commission data show. Farmers use this water for wheat and oilseeds sown in October and December.

Source : bloomberg.com