New Delhi, Feb 12 - India's vegetable oil imports surged 78 percent in January as low global prices and an expected higher import tax drove purchases to the highest level since trade rules were eased 15 years ago, a leading trade body said.
Imports are expected to be lower in February because of high stocks after last month's surge, but purchases are likely to be about 50 percent higher than February 2008, said a leading trader and former head of trade bodies, Govindbhai Patel.
January's surge has hurt domestic industry in India, the world's biggest vegetable oil importer after China, during the peak crushing season, B.V. Mehta, executive director of the Solvent Extractors' Association, said on Thursday.
"Most of the plants are currently running on marginal or negative margin, affecting overall crushing and availability of domestic oils," he said.
Traders said Argentine soyoil prices stood at $700 per tonne, free on board, a discount of $85 to domestic rates.
January imports of vegetable oils amounted to 912,342 tonnes, which includes 856,690 tonnes of edible oils.
Imports in the first three months of the season that began in November rose 77.5 percent to 2.2 million tonnes, the trade body said in a statement.
India in 2008 slapped an import tax of 20 percent on crude soyoil but decided to continue its zero import tax on crude palm oil as it accounted for almost 90 percent of the country's total vegetable oil imports.
Imports of refined oils between November and January rose by 20 percent to 408,565 tonnes from the year-ago period, while those of crude vegetable oils jumped to 1.7 million tonnes, up 96 percent from a year earlier. India imported 1,914 tonnes of rapeseed oil, its first purchase of the cooking medium since 2002/03, the statement said.
Mehta said imports of rapeseed oil would hurt the domestic industry and hit rapeseed prices.
Last week Mehta had said India's 2009 rapeseed harvest was likely to rise 35 percent to 6.5 million tonnes because of higher acreage and good weather.
The crop accounts for 15-16 percent of local edible oil demand.
India imports almost half of its annual domestic demand of about 11 million tonnes in the form of palm oil from Indonesia and Malaysia and soyoil from Brazil and Argentina.