India edible oil imports to cost 33 pct more next yr

By Mayank Bhardwaj

NEW DELHI (Reuters) - India, the world's top edible oil importer, may have to pay a third more next year because of soaring global prices caused by diversion of oils to produce biofuel, a top industry official said on Tuesday.

The country annually consumes about 10 million tonnes of edible oils, with imports contributing half, and also buys non-edible oils.

Ashok Sethia, president of the Solvent Extractors' Association of India, said India would have to pay 120 billion rupees ($3 billion) for imports of 5.6-5.8 million tonnes of vegetable oils, including edible and non-edible, in the oil year that ends on Oct. 31, up from 90 billion rupees last year.

"Assuming we import the same quantity, we will have to shell out 160 billion rupees next year," Sethia, who heads the apex body of 750 vegetable oil traders, said, and probably 200 billion in the following year.

With crude oil prices at near $87 a barrel, there will be more demand for oils to produce biodiesel, which competes with diesel.

Prices of palm oil, used in products ranging from cosmetics and confectioneries to biofuel, has risen more than 40 percent since the start of January.

Malaysian palm oil futures rose 2.7 percent to a record early on Tuesday as prices of rival soybean oil surged, traders said.

The benchmark January contract on the Bursa Malaysia Derivatives Exchange rose as much as 73 ringgit, to stand at 2,791 ringgit ($825) per tonne. It lost some of the gains and slipped to 2,761 ringgit at the end of the morning session.