14/01/2013 (Business Recorder) - Monthly palm oil imports by India, the world's top edible oil importer, rose 17 percent in December, fed by scarce domestic supply of alternatives and attractive overseas prices due to record stocks in key supplier Malaysia, a Reuters survey showed. Traders said palm oil imports could rise again in January as Malaysia waived an export duty with effect from January 1 in a bid to reduce its bulging stocks.

Palm oil imports could touch 720,375 tonnes in December, the average forecast in a survey of eight traders showed on Friday. The domestic prices of edible oils were higher than imported oils last month, traders said, as processors had small quantities of oilseeds available for crushing.

That was because domestic growers held back supplies, expecting a hike in duty by the Indian government to curb cheap imports of crude palm oil (CPO). Rapeseed supplies were almost exhausted during the start of the winter planting season. Traders said edible oils such as soya and rapeseed ranged between $1,210 and $1,390 per tonnes last month in Indian markets. Imported crude palm oil was around $725 to $750 per tonne.

In November, Indian processors sought a hike in duty on imports of crude palm oil, to protect oilseed growers' interests against cheap purchases from Malaysia. Traders said CPO imports were likely to have been about 644,375 tonnes last month, while refined palmolein imports could have been almost flat at 76,000 tonnes, according to the survey average, with a range of 55,000 to 100,000 tonnes.

In November, India imported 534,556 tonnes of CPO and 76,519 tonnes of RBD palmolein, according to the Mumbai-based Solvent Extractors' Association of India (SEA). More than half of India's edible oil demand of 16 million to 17 million tonnes is met by imports. A population growing at the rate of about 19 million people a year, along with an increasingly wealthy middle class, boosts demand.

India buys mainly palm oils from Indonesia and Malaysia, and small quantities of soyaoil from Argentina and Brazil. The government tries to encourage domestic production, partly by guaranteeing minimum prices, but has had limited success. Total vegetable oil imports, including non-edible oils, would have risen 20.8 percent in December to 846,125 tonnes from the previous month, the Reuters survey showed.

Imports of soyaoil and sunflower are also likely to have risen last month as the soft oils are preferred during the winter season when demand for wedding feasts surges. Soyaoil imports are likely to have more than doubled to 34,500 tonnes last month, while sunflower imports could be 67,250 tonnes, up 41.6 per cent. The survey showed average estimated stocks at Indian ports at the end of December down about 8 percent to 650,000 tonnes from November, reflecting poor domestic supplies.