6/7/06 (Reuters)  -  NEW DELHI: Edible oil imports by India, the world's leading buyer, is set to drop by about half a million tonnes in the year ending October thanks to higher domestic availability, trade officials said yesterday.

It is too early to estimate imports in the new season from November but recent rains after a lull in the oilseed growing regions of western Maharashtra and Gujarat states and central Madhya Pradesh have raised hopes of a good crop, they said.

"The rains have changed the sentiment and the crop could be lower or delayed but it is not gloomy any more," said B. V. Mehta, executive director of the Solvent Extractors' Association of India.

Despite good showers in some regions, the rains have been erratic with large tracts of the country facing long dry spells in June.

India imports nearly half of its annual needs of 10 million tonnes of refined and oils, with palm oils coming from Malaysia and Indonesia, and soft oils from South America.

"Higher domestic production of oils will drag down our edible oil imports this year to close to 4.5 million tonnes from 5.1 million a year ago," said Govindbhai Patel, a leading groundnut oil dealer in Gujarat.

Patel said domestic edible oil production in 2005/06 has risen by more than 1.3 million tonnes to 6.9 million tonnes with better crushing of oilseeds, mainly groundnut, soyabean and rapeseed.

He added that of the total 4.5 million tonnes of imports during the year, soyaoil would constitute 1.7 million tonnes while palm oils would account for the remainder.

India imported about 2.1 million tonnes of soyaoil and close to 3.0 million tonnes of palm oils in 2004/05.

Mehta estimated edible oil imports between August and October at 1.5 million tonnes, about same levels in the year -ago period.

He said edible oil imports between November and July would be about 3.1 million tonnes, down from 3.6 million tonnes a year ago, mainly because of higher domestic availability of rapeseed for crushing from the stocks held by the Government.

"It is a little too early to talk about imports next year but some areas under oilseeds in Maharashtra have been diverted to sugarcane and cotton which were fetching better prices," Mehta said.

The Government might not be able to achieve its target of 27 million tonnes oilseed output in the new season starting in November, he said. The farm ministry has estimated the country's oilseed output in 2005/06 at 26.7 million tonnes. - Reuters