Drought to push India's vegetable oil import bill to $14 bln

By Mayank Bhardwaj

NEW DELHI (Reuters) - A second consecutive drought could keep India's oilseeds output steady despite a rise in vegetable oil consumption, driving up its annual edible oil import bill by 14 percent to about $14 billion, a leading industry body said on Thursday.

India, the world's biggest buyer of the cooking ingredient, has suffered back-to-back drought years for the fourth time in over a century, raising fears about farm output, especially of edible oils, the third-biggest import item after crude oil and gold.

The country imports more than half of its edible oil requirements by buying palm oil from Malaysia and Indonesia and a tiny amount of soyoil from Brazil and Argentina to make up for a shortfall in soybean, rapeseed and peanut output.

After monsoon rains about 12 percent below normal in 2014 and a similar forecast for this year, output of oilseeds is unlikely to surpass last year's levels, D S Rawat, secretary general of ASSOCHAM, said in a statement.

"Vegetable oils imports would reach around $14 billion for 2015/16 which was actually around $10 billion last year," Rawat said.

Edible oil imports were worth $7.2 billion in the fiscal year to March 2014.

Vegetable oil consumption is rising rapidly due to an expanding population, higher income levels and the Indians' penchant for calorie-laden curry and deep-fried food.

As the first back-to-back drought in three decades shrivels crops, soybean yields are likely to drop this year despite an increase in the area under cultivation, keeping output steady at year-ago levels.

Vegetable oil imports in August jumped 3 percent to 1.37 million tonnes and purchases since November 2014, when the current marketing year began, totalled 11.7 million tonnes, up 23 percent from a year earlier.

(Reporting by Mayank Bhardwaj; Editing by Mark Potter)