22/01/2008 (Bloomberg) - India, the world's second-biggest buyer of vegetable oils, may import 5 percent more of the commodity to boost supplies as domestic oilseed production falls, a trade body said.

Purchases may total as much as 5.9 million metric tons this year ending October, compared with 5.6 million tons a year ago, according to Ashok Sethia, president of the Solvent Extractors' Association of India, which represents 800 oilseed processors.

Increased imports by the South Asian nation may support the past year's 62 percent gains in palm oil prices in Malaysia. The country meets almost half its domestic edible oil needs through overseas purchases of palm and soybean oils.

``In view of lesser crop and carry-over stock, we may have to import higher quantity to bridge the gap between demand and supply,'' Sethia said in a note to the group's members. Oilseed production this year may be 26 million tons, 13 percent below the government's target of 30 million tons, he said.

The South Asian nation's edible oil imports rose to 624,102 tons in the two months ended December from 619,630 tons in the year ago period, according to the Solvent Extractors Association.

Winter oilseed crop may decline to 9 million tons from 9.5 million tons last year after farmers planted less mustard oilseed.

``The high price of edible oils would squeeze demand to some extent. Still, the overall vegetable oil imports will increase,'' Sethia said.