India, the biggest buyer of palm oil, may produce 13 percent more oilseeds as above-normal rain in the growing areas lift soybean and peanut yields. Output may jump to 23.2 million metric tons in the season starting Nov. 1 from 20.5 million tons this year, Govindlal G. Patel, managing partner at G.G. Patel & Nikhil Research Co., told a conference in Mumbai today. Patel, 71, has been trading oilseeds for more than four decades. India may still need to import a record amount of soybean and palm oils as growing population and incomes drives demand for fried and processed foods, supporting a rally in prices of the commodities. Purchases may climb to 9.27 million tons, five percent more than this year, said Patel. “While India may produce more oils, rising consumption and population will lead to more imports,” Dorab Mistry, director at Godrej International Ltd., told reporters, repeating Patel’s cooking-fat import forecast. Godrej is one of India’s biggest buyers of edible oils. Palm oil has rebounded 18 percent from an eight-month low on July 7 on speculation that the festival season in Asia will stoke demand. Soybean oil reached a two-year high in Chicago yesterday on speculation that China, the biggest buyer of the oilseed, may increase purchases as freezing weather hurts crops. December-delivery futures rose 1.1 percent to 2,701 ringgit ($873) a metric ton in Kuala Lumpur, rounding off a fourth week of gains. November-delivery soybeans added as much as 1 percent to $11.04 a bushel in Chicago, the highest level since June 2009, and soybean oil for December delivery rose 0.9 percent to 44.28 cents a pound. ‘Expensive’ Soybean oil’s premium over palm oil widened to $106.33 a ton yesterday, the most since Aug. 4, Bloomberg data show. The two commodities are direct substitutes. “India may import more palm oil next year as soybean oil becomes more expensive,” said Mistry. “Palm oil has a good opportunity to capture price-sensitive markets like India.” India’s vegetable oil demand may increase 4.4 percent to 15.7 million tons next year, Patel said, concurring with Ashok Sethia, the president of the Solvent Extractors’ Association of India, who said Sept. 21 that imports may reach 9.5 million tons. Palm oil purchases may total 7.2 million tons and soybean oil 1.5 million tons, Patel said. India relies on imports to meet half its cooking oil needs and buys palm oil from Indonesia and Malaysia, and soybean oil from Argentina and Brazil. Imports surged 64 percent to a record 1.07 million tons in August from 650,603 tons a year earlier, the extractors’ association said Sept. 14. Soybeans, Peanuts Patel’s production forecast includes 14.1 million tons of monsoon-planted crops including soybeans and peanuts, and 9.13 million tons of winter harvests. Growers may gather 9.5 million tons of soybeans, the biggest monsoon oilseed crop, up from 8.2 million tons this year, he said. The farm ministry yesterday said the monsoon-sown oilseed production may total 17.27 million tons, including 9.8 million tons of soybeans. The prediction is more than Patel’s forecast. Peanut output may jump 21 percent to 5.8 million tons next year, while production of the oil extracted from the oilseed may surge 45 percent to 550,000 tons, Patel said. Overall edible oil output oilseeds may total 6.85 million tons, compared with 6.23 million tons this year, he said. The monsoon, the main source of irrigation for the nation’s 235 million farmers, has been 104 percent of the 50-year average this season, exceeding the weather bureau’s forecast. To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net.

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