February 27, 2012

Due to a strengthening rupee as well as adverse weather hitting the winter-sown oilseed crop, India's edible oil imports are likely to increase in the next two months, trade executives said Friday (Feb 24).

"With the lower domestic crop, our dependence on imports will be higher...imports may be close to 800,000 tonnes in March," said Atul Chaturvedi, chief executive of Adani Wilmer Ltd.

India is the world's biggest importer of edible oil and buys more than half of its requirement. The South Asian nation imported 647,693 tonnes in January, down 6.4% from a year earlier.

Lower soil moisture during the peak sowing period and unusually warm weather conditions in October in the key northwest growing regions have affected output of rapeseed, the second-biggest oilseed crop in India after soy.

Production of the winter-sown oilseed is expected to fall below six million tonnes, compared with seven million tonnes last year, said Vijay Data, vice president of the Solvent Extractors Association of India.

The trade body will release the final estimate of the rapeseed crop early next week.

Edible oil consumers are also likely to purchase more next month as a strong Indian rupee have made imports cheaper, said Badruddin Khan, assistant vice president at brokerage firm Angel Commodities Pvt. Ltd.

Edible oil prices in India have declined about 3% in the past month, but rose nearly 4% in the global markets during the same period. The rupee has gained almost 10.5% to 49.11 against the US dollar, after touching a record low of 54.29 on December 15.