KUALA LUMPUR (March 20 2003) : India's edible oil imports may rise 6.3percent on the year to 4.71 million tonnes in the year to October 2003 dueto falling domestic output, an industry official said on Wednesday.

India, the world's largest consumer, purchased 4.43 million tonnes ofedible oils in 2001-02, down from 4.83 million the previous year.

It buys palm oil from main producers Malaysia and Indonesia and soyaoilfrom Argentina, Brazil and the United States.

"We have drought in almost all the states," said Govindlal G. Patel, aboard member and former president of the Solvent Extractors' Associationof India, a leading trade body based in Bombay.

India's oilseed production, which includes groundnut, soyabean, rapeseed,sunflower and cottonseed, was estimated at 4.68 million tonnes in 2002-03compared with 5.60 million tonnes previously because of the drought, hetold Reuters on the sidelines of an international edible oils conferencein Kuala Lumpur.

The government has said rainfall during the monsoon season, which runsfrom June to September, was 19 percent below normal, causing drought innearly one-third of India.

Patel said lower local production would help boost imports despite a dropin per capita consumption.

"Seventy percent of the population depends on agriculture income, so theirpurchasing power is terribly reduced.

And due to higher prices, the consumption will be less," he said.

"I expect per capita consumption to come down to 9.1 kg in 2002-03. Lastyear, it was 9.7 kg. All edible oil prices are expensive," he added.

India's population is estimated at 1.06 billion in 2002-03, up from 1.04billion the previous year.

Patel said Malaysia's crude palm oil futures may have to fall to 1,300ringgit ($342.10) a tonne to generate fresh buying interest from India,which imports more than two-fifths of its annual edible oil needs of about10 million tonnes.

At 0720 GMT on Wednesday, the benchmark June palm oil futures were threeringgit higher at 1,480 ringgit ($389.47) a tonne after trading as low as1,469 ringgit.

INDONESIA MORE ATTRACTIVE: Patel said India was likely to import 3.13million tonnes of palm oil in the current year, up from 2.93 million in2001-02.

Soyaoil imports were seen at 1.58 million tonnes compared with 1.49million in 2001-02.

He said India was likely to buy more crude palm oil from Indonesia, theworld's second largest producer after Malaysia, because of its cheaperprices.

"Right now Indonesia is more competitive as far as CPO is concerned," saidPatel, adding that Indonesian palm oil was $5 a tonne cheaper than theMalaysian product.

Indonesia exported 6.4 million tonnes of palm oil in 2002, of which around60 percent went to India, said traders.

India was Malaysia's second-largest palm oil buyer after China in 2002,taking 1.68 million tonnes, down from 2.03 million tonnes in 2001.-Reuters