05/02/2008 (Bloomberg) - India, the world's biggest buyer of vegetable oil after China, may cut import duties on cooking fat or increase purchases on global markets, bolstering prices.

``Both are options,'' Federal Food Secretary T. Nanda Kumar said in an interview in Dubai today. ``Improving supplies and reducing prices is the main concern for the government.''

India cut import taxes on vegetable oils four times last year to curb inflation, joining China, Malaysia and Indonesia in taking measures to stockpile staple foods and stabilize prices. Higher purchases by India may support prices of palm oil and soybean oil, which jumped to records today.

``All governments control prices and they will keep doing it to protect their domestic consumers,'' Amol Tilak, an analyst at Mumbai-based Kotak Commodity Services Ltd., said. ``Edible oil is an essential ingredient in our food intake and globally there is a problem. Demand is huge while supply hasn't yet improved.''

Palm oil jumped to a record after Indonesia, the biggest producer, said it would increase export taxes if prices exceed $1,100 a ton. The oil reached 3,458 ringgit ($1,070) in Malaysia. Soybean oil, palm oil's main substitute, also rose to a record, gaining for a ninth day to 56.25 cents a pound in Chicago.

``We will continue to track prices and take the steps needed,'' Nanda Kumar said. ``It has to be timed well so as not to transfer the benefit to the exporting nations.''

Record Prices

Palm oil futures on the Malaysia Derivatives Exchange, the global benchmark, rose 0.12 percent to 3,431 ringgit. The price of soybean oil, palm oil's main substitute, climbed to a record 56.25 cents a pound in Chicago before falling for the first time in nine days. The commodity fell 0.6 percent to 55.44 cents at 6:03 p.m. Singapore time.

India's edible oil imports may rise 15 percent to as much as 5.4 million tons in the 12 months ending Oct. 31, compared with a year earlier, according to a Bloomberg survey last month. Imports climbed 7 percent to 4.72 million tons in the year ended October from 4.42 million tons a year earlier, according to the Solvent Extractors' Association of India.

The South Asian nation imports palm oil from Malaysia and Indonesia, and purchases soybean and sunflower oil from Brazil and Argentina.