14/07/2010 (Bloomberg) - Vegetable oil imports by India, the second-biggest user after China, dropped for a sixth month in June as rising domestic inventories deterred buyers.

Purchases fell to 732,232 metric tons from 780,679 tons a year earlier, the Solvent Extractors’ Association of India said today in an e-mailed statement. Stockpiles were at 1.11 million tons on July 1 from 1.075 million on June 1, the group said.

Imports may jump as much as 24 percent to 2.6 million tons in the quarter ending Oct. 31 to meet demand during the festival season, Govindlal G. Patel, who has been trading vegetable oils for four decades, said yesterday in an interview. The price of Malaysian palm oil, which touched an eight-month low last week, may rise 18 percent to 2,800 ringgit a ton by November, he said.

“The declining trend will be reversed in the coming months as domestic supply is going down,” said B.V. Mehta, executive director of the association. “Imports are bound to pick up as demand increases because of the festivals.”

Palm oil for delivery in September gained as much as 1.3 percent to 2,384 ringgit ($746) and traded at 2,374 ringgit at 4:50 p.m. local time on the Malaysia Derivatives Exchange.

India overtook China as the biggest buyer of the commodity in 2009, helping the edible oil to a 57 percent annual gain. The two countries, along with Pakistan, Malaysia and Indonesia, mark their important festivals in the quarter ending September, with communal meals stoking edible oils consumption.

Crude palm oil purchases by India advanced 19 percent to 421,462 tons in June from a year earlier, the association said. Imports of soybean oil and sunflower oil were 192,649 tons and 34,559 tons each, it said.

Incoming shipments of palm oil may exceed 500,000 tons on average each month through October, with soybean oil purchases at about 200,000-250,000 tons, Patel said.

Vegetable oil imports in the November-June period fell 4 percent to 5.58 million tons, the association said.

Palm oil makes up almost 80 percent of the purchases.