10/03/2009 (Reuters), Kuala Lumpur - India's sunflower oil imports are expected climb seven-fold as the nation makes first big purchases from the Black Sea region in four years, taking advantage of a zero percent import tariff and plentiful supplies.

The surge in India's sunflower oil imports come at the cost of soyoil from Argentina which attracts 20 percent import duty, but palm oil's share of the Indian market is likely to remain unchanged, traders said on Tuesday. "The price is good and the import duty is favourable, so given the good quantities available, India will buy more of sunoil," a leading trader told Reuters ahead of an industry conference.

India, the world's biggest vegetable oil importer after China, buys about half of its annual consumption of around 11 million tonnes. The imports are made up of about 80 percent palm oil from Malaysia and Indonesia and the balance is soft soils such as soyoil and sunflower oil.

India has contracted to buy around 300,000 tonnes of sunflower oil since December, and imports are likely to climb to 600,000 tonnes in the current oil year to October, traders said.

Another trader said India was buying sunflower oil mainly from Ukraine.

"After a gap of four years, India has opened flood gates for sunoil imports and Ukraine is the major beneficiary as they had so much sunoil available after a fantastic crop."

Ukraine is estimated to have produced 6 million tonnes of sunseed in 2008 against 4.9 million a year ago.

Ukraine's sunflower oil exports are likely to rise to 1.76 million tonnes in the 2008/09 season from 1.33 million in 2007/08 due to a higher sunoil output, a top consultancy said in December.

UkrAgroConsult agriculture consultancy said in a report sunoil production was likely to rise to 2.32 million tonnes this season from 1.87 million in the previous season.

Traders said sunflower oil was quoted around $750 per tonne including cost, insurance and freight at Indian ports compared with $836 per tonne for soybean oil after 20 percent tariff. One Indian trader said he bought 20,000 tonnes of sunflower oil at $740-$750 a tonne last week. The world's leading vegetable oil traders and consumers will gather in the Malaysian capital on Wednesday for the Bursa Malaysia palm oil conference.

Issues to be discussed range from price forecasts for palm oil, whose discount to soy has narrowed since January to the smallest in a year, to the threat from flagging demand and the edible oil's seasonal peak in output.