KUALA LUMPUR, March 4 (Bernama) -- India is now looking to importoilseeds, particularly rapeseed and sunseed, to replace vegetable oils, amove which may adversely affect palm oil exports to the country.

Dorab E. Mistry, director of Godrej International Ltd, one of India'soldest business corporations, said "if this were to happen, about half amillion tonnes of oilseeds could be imported in the first year".

"That could replace about 200,000 tonnes of vegetable oil imports, withboth palm and soy losing about 100,000 tonnes each. Logically, the mostaffected would be copra and palm kernel based on import parities," he saidin his presentation at the Annual Palm & Lauric Oils Conference &Exhibition here Friday.

In his paper entitled "India and the Price Outlook for World Vegoils --2005", Mistry said India's Agriculture Minister has publicly backed theimportation of raw materials rather than finished good and spoken of thedesirability to import oilseeds.

Speaking to reporters after the conference, he said in order to overcomethe shortage of oilseeds and edible oils, there is a need for India toencourage the import of oilseeds while protecting the interest of Indianfarmers.

"With the India's current rate of import duty on oilseeds at 35 percent,it doesn't make sense to import such oil, the import duty on oilseeds mustbe reduced first," Mistry said.

"The import of oilseeds will not happened for the next 12 months. Howeverstarting middle or late of 2006, we can see a possibility of Indiaallowing the import of oilseeds," he said.

Asked about the impact on Malaysia's palm oil, Mistry said demand would beslightly affected when India switched to oilseeds.

India, the world's fourth largest vegetable oil economy, has 15,000 oilmills, 650 solvent extraction plants, 250 hydrogenated oil units and over1,000 refineries.

The turnover of India's oilseed-based sector is more than US$11 billioneach year, while the import and export trade is worth about US$2.5 billionannually.

With annual imports averaging 4.5 million tonnes, India is the world'ssecond largest importer of vegetable oils after China and the thirdlargest consumer after China and the European Union.

Annual consumption of oils and fats is over 10 million tonnes andestimated to be growing at about four percent a year.

-- BERNAMA