By Thomas Kutty Abraham

Aug. 13 (Bloomberg) — India, the world’s biggest buyer of vegetable oils after China, may boost purchases to a record 6 million metric tons this year as domestic supplies lag demand.

Imports may total 600,000 tons a month in August to October period, compared with 565,124 tons in July, Mumbai-based Solvent Extractors’ Association said in a statement today. Purchases were 5.6 million tons last year.

Prices of palm oil in Malaysia, the global benchmark, have tumbled 43 percent from a March record of 4,486 ringgit ($1,352) a ton. The slump may cut import costs for the South Asian nation that’s battling the fastest inflation in 13 years.

“The recent decline in prices has come as a big relief to Indian consumers,” said B.V. Mehta, executive director at the extractor’s association. “We have a big shortfall in domestic supplies and import remains the only option.”

India, which relies on purchases abroad to meet almost half its edible oil demand, in March scrapped the import tax on crude soybean and palm oils, and cut the levy on refined edible oil, to bolster domestic supplies. The government banned futures trading in soybean oils in May to rein in prices of the commodity.

Spiraling food prices have caused Prime Minister Manmohan Singh’s Congress party to lose ground in nine of 11 state polls since January 2007. Singh faces elections in six more states this year and a general election by May 2009.

India’s edible oil imports in July fell 3 percent to 532,456 tons from a year ago, while purchases in the nine months to July climbed 10 percent to 3.63 million tons, the association said.

New Crop

Vegetable oil imports, including hydrogenated fats, totaled 4.14 million tons between November and July, 9 percent more from a year earlier. Imports included 2.9 million tons of crude palm oil and 418,899 tons of crude soybean oil, the association said.

“Imports will slow only from November with the arrival of the local crop,” Mehta said. “The crop conditions have improved because of recent rains in Gujarat and Maharashtra.”

Farmers planted monsoon oilseeds, which make up more than 60 percent of India’s production, to 15.6 million hectares, little changed from a year earlier, the farm ministry said last week.

India buys palm oil from Indonesia and Malaysia, and soybean oil from Argentina and Brazil.

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