Cooking-oil demand in India, the world’s largest palm oil importer, is poised to jump 44 percent in the next eight years as rising incomes boost sales of noodles, cookies and fried foods, a government official said.
Consumption may surge to 23 million metric tons by 2020 from 16 million tons now, D. Bhalla, a joint secretary in the country’s food ministry, told an industry conference in Mumbai today. Imports will rise significantly in coming years to meet this demand, he said. The per capita consumption of edible oils in India is 13.5 kilograms, compared with the global average of about 26 kilograms, he said.
Rising Indian use of cooking oils may help Indonesia and Malaysia, the world’s biggest palm oil producers, to reduce inventories, and potentially stem a decline in prices. India’s imports are set to surpass 10 million tons for the first time next year as dry weather trims supply of domestic oilseed crops and demand increases, GG Patel & Nikhil Research Co. Managing Partner Govindlal G. Patel, who’s traded cooking oils for more than three decades, said yesterday.
“Demand in India will get a boost from a growing economy and lower edible oil prices,” said Dinesh Shahra, managing director of Ruchi Soya Industries Ltd., the country’s biggest importer of cooking oils. “Every year consumption is growing at the rate of 4 percent.”
India, Asia’s third-largest economy, expanded at an average 7.9 percent in the past five years, according to the government.
The South Asian nation, the world’s biggest cooking oil consumer after China, meets more than half its demand through imports. India buys palm oil from Indonesia and Malaysia, and soybean oil from the U.S., Brazil and Argentina. Vegetable-oil imports climbed 19 percent to 8.16 million tons between November and August, according to the Solvent Extractors’ Association of India.
Palm oil imports may reach an all-time high of 8.1 million tons in 2012-2013, compared with 7.5 million tons this year, while soybean oil purchases may climb to 1.2 million tons in 2012-2013 from 1.1 million tons, GG Patel & Nikhil’s Patel said.
Palm oil for December delivery fell 2 percent to 2,763 ringgit ($906) a ton on the Malaysia Derivatives Exchange in Kuala Lumpur on Sept. 21, the lowest price at close since October 2010. Futures have fallen 13 percent this year.