India's edible oil imports may rise 6.3 per cent on the year to 4.71 million tonne in the year to October 2003 due to falling domestic output, an industry official said on Wednesday.

India, the world's largest consumer, purchased 4.43 million tonne of edible oils in 2001-02, down from 4.83 million the previous year.

It buys palmoil from main producers Malaysia and Indonesia and soyoil from Argentina, Brazil and the United States.

"We have drought in almost all the states," said Govindlal G Patel, a board member and former president of the Solvent Extractors' Association of India, a leading trade body based in Mumbai.

India's oilseed production, which includes groundnut, soybean, rapeseed, sunflower and cottonseed, was estimated at 4.68 million tonne in 2002-03 compared with 5.60 million tonne previously because of the drought, he told Reuters on the sidelines of an international edible oils conference in Kuala Lumpur.

The government has said rainfall during the monsoon season, which runs from June to September, was 19 per cent below normal, causing drought in nearly one-third of India.

Patel said lower local production would help boost imports despite a drop in per capita consumption.

"Seventy per cent of the population depends on agriculture income, so their purchasing power is terribly reduced. And due to higher prices, the consumption will be less," he said.

"I expect per capita consumption to come down to 9.1 kg in 2002-03. Last year, it was 9.7 kg. All edible oil prices are expensive," he added.

India's population is estimated at 1.06 billion in 2002-03, up from 1.04 billion the previous year.

Patel said Malaysia's crude palm oil futures may have to fall to 1,300 ringgit ($342.10) a tonne to generate fresh buying interest from India, which imports more than two-fifths of its annual edible oil needs of about 10 million tonne.

At 0720 GMT on Wednesday, the benchmark June palm oil futures were three ringgit higher at 1,480 ringgit ($389.47) a tonne after trading as low as 1,469 ringgit.

Indonesia more attractive

Patel said India was likely to import 3.13 million tonne of palm oil in the current year, up from 2.93 million in 2001-02. Soyoil imports were seen at 1.58 million tonne compared with 1.49 million in 2001-02.

He said India was likely to buy more crude palm oil from Indonesia, the world's second largest producer after Malaysia, because of its cheaper prices.

"Right now Indonesia is more competitive as far as CPO is concerned," said Patel, adding that Indonesian palm oil was $5 a tonne cheaper than the Malaysian product.

Indonesia exported 6.4 million tonne of palm oil in 2002, of which around 60 per cent went to India, said traders.

India was Malaysia's second-largest palm oil buyer after China in 2002, taking 1.68 million tonne, down from 2.03 million tonne in 2001.