* India is expecting a winter-harvested oilseed crop, mainly soybean, of 5.3 million tonnes this year, up from 3.5 million tonnes a year ago

23/10/2007 (Daily Times Pakistan), New Delhi - Sharply higher global prices of palm and soy oil will limit edible oil imports next month by private trade in India, the world’s leading buyer, despite lower oil stocks at the ports, traders said on Tuesday.

Imports in November will be about 250,000 tonnes, same as a year ago, but the availability will be lower and could push domestic prices higher, they said.

Indian had imported 650,000 tonnes of edible oils in October last year and held nearly 500,000 tonnes of oils at the ports by the end of that month, said Govindhbhai Patel a leading groundnut oil trader in Gujarat.

But this year imports in October had dwindled to 350,000 tonnes because of high prices and end-October stocks at ports were estimated at 200,000 tonnes, he said. “Importers look at the huge domestic crop and are unable to digest the high international prices to buy,” Patel said.

India is expecting a winter-harvested oilseed crop, mainly soybean, of 5.3 million tonnes this year, up from 3.5 million tonnes a year ago.

Palm oil hit a record high of 2,795 ringgit ($828) a tonne last Friday and analysts say prices are expected to further rise by the end of the year, as the world’s appetite for biofuels grows and production remains stagnant.

Dorab Mistry, a leading industry analyst has forecast palm oil prices to hover in the 2,600-3,000 ringgit range in the near term as demand is likely to surpass supplies and supported by an expected increase in rival soyoil prices.

In the last one year, global prices of soy oils have risen by 60 percent while that of crude palm oil has jumped 82 percent, said Ashok Sethia president of the Solvent Extractors’ Association of India. Sethia has written to Farm Minister Sharad Pawar suggesting that use of edible oil for fuel purposes should be discouraged to keep a check on prices. The domestic prices of oils during the last one year has gone up by only about 20 percent, mainly because of the government slashing import duties and keeping tariff values on oils unchanged since August 2006. There may not be any soy oil imports in November this year against purchases of around 53,000 tonnes in the same month last year, Patel said, adding all imports in the coming month would be palm oil. India last week asked three state-run firms and a farmer’s cooperative to import 125,000 tonnes of edible oils by the middle of November to augment supplies and keep a lid on prices.

Traders said groundnut from the newly harvested crop have started arriving in markets in Gujarat and the pace would increase by early November. They said the new crop has had a salutary effect on the prices of groundnut oil but high global prices could lure traders to export oil.

“Commitments for export of around 2,000 tonnes of groundnut oil for November delivery has been made,” Patel said. “Domestic prices of edible oil may rise in November and December.”

Patel estimated India’s edible oil imports in the new oil year beginning in November at around 4.8 million tonnes, up from about 4.6 million tonnes in the current year.

-Reuters-