Thursday, June 12 2003 - INDIA is expected to buy more palm oil fromMalaysia in the next few months as its crop output dropped because of adeadly heatwave that has killed more than 1,000 people and dried upplantations.

Traders said there has been a marked increase in exports to India in Apriland May, and the momentum is expected to continue until July at least.

The Indian heatwave has been very bad, and crop output may not be verygood, a trader said yesterday.

The trader said Malaysian exports to India could see a single-digitpercentage growth for the year 2003 compared to last year.

India has been Malaysia’s biggest palm oil buyer for the past decade untilit was surpassed by China last year. India bought 1.6 million tonnescompared with China’s 1.8 million tonnes.

The world’s biggest edible oils buyer is currently hit by pockets ofheatwave for the past one month especially in the states of Gujerat andAndhra Pradesh.

The extreme heat has caused millions to suffer from heatstrokes as well asdelaying monsoon rains much needed for a good crop output.

According to the Malaysian Palm Oil Board’s website, India bought 160,438tonnes of palm oil in March, a 29.4 per cent increase compared with124,008 tonnes in the same month last year.

India bought 202,046 tonnes of palm oil in April, almost matching 202,454tonnes in the same month last year.

Last month, unofficial figures by cargo surveyors showed that India boughtas much as 700,000 tonnes of palm oil, a 34.6 per cent increase from Apriland a 41 per cent increase from the same month last year.

Another trader, however, said demand will always be there until Augustthis year regardless of the heatwave because India’s domestic crops suchas kharif, groundnut and cotton are already affected by last year’sdrought.

“The increase is also swayed by the Indian Government’s decision to reducebasic import duty on refined, bleached and deodorised palm oil from 85 percent to 70 per cent last month, which proved popular,” said anothertrader. He added demand may not be for palm oil from Malaysia, but alsofrom Indonesia as well as soyabean oil from both Argentina and Brazil tomeet the shortage.

India is the world’s largest consumer and buyer of the world’s edible oilswith a demand of 3.5 million tonnes a year, of which 50 per cent, or 1.7million tonnes, is supplied by Malaysia.

Malaysia is the world’s biggest producer of palm oil, accounting for morethan 50 per cent of the global output. The country produced 11.9 milliontonnes last year, of which 10.8 million tonnes worth RM19.6 billion wereexported to about 140 countries.