NEW DELHI, June 16 Asia Pulse - The government has been hit with demandsfor a hike in the import duty on refined palm oils so as to avoid a pricecrash.

Prices will be stable, idle refining capacity will be used better andfarmers encouraged to sow more oilseeds during the kharif season in theevent of a hike in customs duty on refined palm oils, Executive Director,Solvent Extractors Association B V Mehta said.

A rise in global stocks with good palm and soya crops in south-east Asiaand the Americas, respectively, along with instances of China reneging onits import contracts has led to a crash in global prices.

Edible oil market watchers feel that any hike in duty on refined oils willsend a postive message across and control any unwarranted fall in pricesduring the kharif sowing season.

Last year the government cut the duty on refined palm oils to 70 per cent,down from 92.6 per cent to prevent any unwarranted hike in domestic edibleoil prices after the nation had passed through a devastating drought.

Domestic industry cried foul and has been demanding restoration of theduty differential with crude palm oil on which a duty of 65 per cent islevied.

It has complained of lesser capacity utilisation in refineries due toinflow of refined, bleached and deodorised (RBD) palm and palmolein oil.

At one point of time before the cut in duty, early last year, refined oilimport had stopped altogether but is now increasing gradually.

(PTI)