12/11/2009 (Dow Jones), New Delhi – India vegetable oil imports this marketing year may fall marginally due to rising global prices and expectations that the country's soybean output will be higher than in 2009-10, a senior industry executive said Friday.

Sat Narain Aggarwal, chairman of the Central Organisation for Oil Industry and Trade, told Dow Jones Newswires that imports could drop by about 2% this marketing year through October 2011.

Crude palm oil futures on Malaysia's derivatives exchange rose to a 28-month high on Nov. 10 due to concerns of a wide demand-supply gap. Palm oil constitutes about 70% of India's total vegoil imports.

Demand for cooking oil is rising in India, which meets more than half of its vegoil requirement through imports. The country is expected to have imported 9.0 million metric tons of vegoil in the last marketing year.

Total imports in the first 11 months of the marketing year that began November 2009 increased 5% to 8.41 million tons from 7.98 million tons with vegoil imports during September rising by 6% to 960,752 metric tons, according to trade data.

Erratic global weather patterns have hurt growth in production of several agricultural commodities–such as wheat, sunflower seeds, soybeans, canola and palm oil–driving prices to multi-year highs. According to a top industry analyst, prices of vegetable oils, including canola and palm oil, will probably remain high in 2011 due to a shortfall in global production and surging demand.

However, normal monsoon rains in India in 2010 is likely to push up local soybean output to 9.3 million-9.5 million tons in 2010-11, Aggarwal said. The country had produced about 8.5 million tons of soybean in 2009-10.

He was optimistic also about the rapeseed crop, saying output will rise to 6.5 million-7.0 million tons in 2010-11 from 6.5 million tons in 2009-10. "If the weather continues to be good and there is a brief spell of rain, the crop could be higher," Aggarwal said.

The Central Organisation for Oil Industry and Trade is expected to release its estimates of summer-sown oilseed crops Saturday.