India's vegoil imports down 7.5%

Country's March palm oil imports fall for 2nd month in a row

India's imports of palm oil fell for a second straight month in March, as domestic supply improved and purchases by the world's biggest buyer continued to suffer from an import levy imposed in January.

The world's biggest importer of vegetable oils, buys mainly palm oil from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.

Palm oil imports dropped 12 per cent to 708,262 tonnes in March, Mumbai-based trade body the Solvent Extractors' Association, said in a monthly update.

Imports of all vegetable oils, including non-edible oils, fell 7.5 per cent to 896,714 tonnes in March, pulled down by the drop in palm oil imports, the data showed.

Higher domestic cooking oil supplies, as the rapeseed harvest season peaked last month, helped to curb imports. Rapeseed is the main oilseed crop grown in winter.

Buyers also drew on stockpiles, as import prices rose.

Stockpiles of edible oil at ports fell nearly nine percent during March to 850,000 tonnes, the trade body said, off a record of 930,000 tonnes on March 1.

"Stocks were still on the higher side despite the decline in monthly imports," said BV Mehta, executive director of the SEA.

Mehta said overall stocks -- including those in transit from ports to refineries -- could depress domestic prices before the summer oilseed planting season. Total stocks had edged up to an all-time record of 2.1 million tonnes by April 1.

Traders said the high level of stocks, both at ports and in transit, could keep imports capped between 800,000 and 885,000 tonnes for the current month.

India's imports of palm oil hit an all-time high in January as leading producers Indonesia and Malaysia made exports more attractive by varying tax levels.

To protect domestic refiners and oilseed growers, India retaliated with a duty of 2.5 per cent on crude palm oil in the second half of January, which had hit imports in February.

On March 21, Malaysian palm oil futures touched their highest since February 25, making imports more costly.

The country imports about 60 per cent of its cooking oil needs of 17 million tonnes. Palm oil makes up nearly 80 per cent of that. In 2011-12, the country imported 10 million tonnes of cooking oil.

The country's demand for cooking oils is rising as its population grows and becomes better off. New Delhi tries to encourage domestic oilseed production, partly by guaranteeing minimum prices to farmers, but has had limited success.

Soyoil imports also declined a quarter to 46,990 tonnes last month, as demand faded at the tail end of the marriage season.