02/01/2008 (Reuters), Hamburg - India is set to increase vegetable oils imports in coming months, especially of palm oil as its domestic oilseed production cannot cope with rising demand, Hamburg-based oilseeds analysts Oil World forecast.

India is likely to import 5.62 million tonnes of edible oils and fats in 2007/2008 (Oct/Sept), up from 5.51 million tonnes in 2006/07, Oil World said.

This was despite a forecast rise in 2007/08 Indian oils and fats production to 9.54 million tonnes from 8.87 million tonnes in 2006/07, it said.

"The country's chronic oilseed and vegetable oil supply deficit may again aggravate in the second half of this season, primarily due to a setback in plantings and production of rapeseed, the most important crop for India's vegetable oil production," it said.

Indian farmers have planted more grain to take advantage of current high prices while dryness had also recently hampered plantings, it said.

Attractive prices mean India was likely to largely turn to palm oil in 2007/08, with the country's imports forecast to rise to 4.04 million tonnes from 3.66 million in 2006/07, it said.

Soyoil imports were likely to fall to 1.35 million tonnes from 1.46 million tonnes, while sunflower oil imports were likely to drop to only 40,000 tonnes from 220,000 tonnes.

"We may still underestimate the shift in import demand from soyoil and sun oil to palm oil," Oil World said.