RTRS - UPDATE 1-India's Feb palm oil imports drop 10 pct mm, duty hike hurts
Posted by Labels: Trader's highlightNEW DELHI, March 14 (Reuters) - India's palm oil imports dropped almost 10 percent in February from an all-time high in the previous month, a trade body said on Thursday, hurt by a duty hike to curb cheap imports from Southeast Asia and higher stock levels.
India is the world's biggest importer of vegetable oils and leading producers Indonesia and Malaysia have been vying to make their oils more attractive by varying taxes. India retaliated with an import duty hike on crude palm oil in January.
It imports about 8-9 million tonnes a year or about half its total demand. Palm oil accounts for about 80 percent of imports.
India's vegetable oil imports fell about 17 percent to 969,175 tonnes last month with palm oil imports dropping to 805,362 tonnes, the Solvent Extractors' Association (SEA) said in a statement.
A Reuters survey had forecast average vegetable oil imports to be 981,500 tonnes in February, including 794,000 tonnes of palm oil.
India buys palm oil mainly from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.
Huge stocks built up due to higher imports in recent months and softer domestic demand as the rapeseed harvest started led to lower imports in February, said B.V. Mehta, executive director of the Mumbai-based trader body.
But he cautioned imports were "still on the higher side and domestic prices are expected to fall in coming months", adding that this could mean domestic oilseeds growers might cut production.
In January, India's vegetable oil imports rose to 1.2 million tonnes, with palm oil imports surging 13 percent on the month to a record 893,313 tonnes.
New Delhi slapped a duty of 2.5 percent on crude palm oil during the second half of January to curb imports, but refiners have demanded a further rise to protect themselves and domestic oilseed growers.
As India's population grows in size and wealth, demand for cooking oils is rising. New Delhi tries to encourage local oilseed production, partly by guaranteeing minimum prices to farmers, but has had limited success.
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