NEW DELHI: India is unlikely to increase import duties on edible oils, including palm oil, immediately, government sources said on Wednesday, after speculation of an imminent rise to curb a surge in overseas purchases of cooking oils pushed futures higher.
Malaysia, one of India's biggest suppliers, ended Kuala Lumpur's export duty on crude palm oil from Jan. 1 and imports could hit a record in January, a senior industry official has said, prompting calls for retaliation from domestic producers.
"No item on edible oil duty hike is listed so far for tomorrow's (Thursday's) cabinet meeting," one of the sources told Reuters.
Soyoil futures had been gaining on speculation there might be an imminent duty increase. The most actively traded soyoil contract on the National Commodity and Derivatives Exchange closed at 715 rupees ($13.1) per 10 kg, losing 1.1 percent from the day's high at 722.8 rupees.
India is the world's top vegetable oil buyer and imported 783,091 tonnes of palm oil in December against 614,574 tonnes in November, way beyond trade expectations.
More than half of its 16-17 million tonnes of edible oils demand is met via imports with nearly 80 percent palm oil.
A population growing at the rate of about 19 million people a year, along with an increasingly wealthy middle class, continue to push demand higher.
India allows duty free imports of all types of edible oils including palm oil and imposes a flat 7.5 percent duty on refined oils.
Any move by India against Malaysia, the world's No. 2 palm oil producer, would not be the first time New Delhi has faced pressure to change its import taxes.
In August, the South Asian country raised its taxable level of refined palm oil cargoes to make the product more expensive and help local farmers and refiners.
That was a response to a cut in 2011 in export taxes on processed grades by top palm oil producer Indonesia, to half of those of crude, to encourage its processing industry and lift earnings from higher value-products.
India is bound by global trade agreements not to raise import duties abruptly or without reason.
India buys mainly palm oils from Indonesia and Malaysia and a small quantity of soyoil from Brazil and Argentina.
[$1 = 54.6000 Indian rupees] - Reuters
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