New Delhi: India, the world’s largest buyer of vegetable oils after China, ruled out import taxes on crude palm oil as prices of domestic oilseeds stay above the assured rates that the government pays farmers.
Domestic oilseed prices are rising, Union agriculture minister Sharad Pawar told reporters in New Delhi on Wednesday. India scrapped import duty on crude palm oil in April to bolster domestic supplies.
India’s plans to extend duty-free imports may help support this month’s rally in palm oil prices in Malaysia, the second biggest producer of the commodity. Futures slid by half in the second half of 2008 as production exceeded demand.
Palm oil for April delivery declined 0.6% to 1,816 ringgit ($502, or Rs24,648) a tonne on the Malaysia Derivatives Exchange at the 12.30pm on Wednesday.
India more than doubled its palm oil imports last month as prices declined amid expectations of government slapping duty on crude palm oil imports. The South Asian nation imported 719,125 tonnes of edible oils in December, up from 276,782 tonnes in the year-ago period, the Solvent Extractors’ Association said.
Crude palm oil imports in December almost doubled to 486,936 tonnes from a year earlier, the association said.
India imposed a 20% duty on crude soya bean oil imports in November to shield oilseed growers from duty-free purchases, while allowing crude palm oil at zero duty.
Pawar also said there’s no plan yet to resume futures trading in wheat and rice, denying trade expectations.
B.C. Khatua, chairman of the Forward Markets Commission said on Tuesday he would write to the Union government seeking an end to the two-year ban as record harvests cool domestic food prices.
On Tuesday, the government scrapped an export tax on basmati rice and lowered the floor price for overseas sales, the latest in a series of cautious moves to ease controls imposed in the last two years amid fears of shortages and inflation.