Thursday March 31, 5:33 PM - NEW DELHI (Reuters) - India raised the baseimport prices of palm and soybean oils on Thursday in line with globaltrends, a move that traders said would firm up domestic oil prices butwould not affect the volume of imports.
India, the world's largest edible oil importer, buys nearly half of itsannual needs of around 10 million tonnes in the form of palm oils fromMalaysia and Indonesia and soft oils from Argentina and Brazil.
The base price of crude palm oil has been increased by $23 to $423 a tonnewhile RBD palm oil was raised to $429 a tonne from $415. Crude soybean oilbase price has been raised to $558 a tonne from $535, a governmentstatement said.The government also raised the base prices of other varieties of palm oilsin line with a firming of international prices.
India fixes base prices to calculate customs duties to prevent the loss ofrevenue due to under-invoicing by some importers. Traders pay importduties on base values irrespective of the prices they paid for the oil.
Traders said the move will firm up domestic vegetable oil and oilseedprices. "The markets are going up because the cost of imported oils hasgone up," Sandeep Bajoria, a leading trader, said.
At 1100 GMT, April soyoil at the Multi Commodity Exchange (MCX) was up0.48 percent at 397.50 rupees per 10 kg. April contract at the NationalCommodity and Derivatives Exchange (NCDEX) was up 0.49 percent at 397.50rupees per 10 kg.
Industry officials said higher base prices would help oilseed farmers geta better price for their crop.
"The price of rapeseed has already increased over the past month and afterthis we expect a further firming up of prices," a Bombay-based tradersaid.
Traders said the price of rapeseed, the summer season's main oilseed crop,has gone up to 16,250 rupees a tonne from 14,750 rupees in the past month.
But dealers said the increase in base prices was not likely to impactimports.
"The tariff revision will not affect imports or the ratio of palm oil andsoy oil purchases as prices of both have been revised," Govindbhai Patel,a leading oilseed trader, said from Rajkot.
Malaysian crude palm oil futures, up nearly 1 percent by midday, closedoff their highs after news of the base price change, although dealers saidthe consolidation had more to do with profit-taking than panic selling.
Malaysia's benchmark third-month crude palm oil, June, closed up abouthalf percent, or 8 ringgit, at 1,463 ringgit a tonne.