16/10/05 NEW DELHI (Financial Times) - India, the world’s leading edibleoil importer, on Saturday raised across the board the base import pricesof palm and soy oils, a move that traders said will firm domestic pricesbut not hit import volumes.

The country buys nearly half of its annual needs of around 11 milliontonnes in the form of palm oils from Malaysia and Indonesia and soft oilsfrom Argentina and Brazil. The government said in a notification on a taxWeb site that the base import price of crude palm oil had been raised to$426 a tonne from $402, while that of crude soybean oil had been increasedto $518 a tonne from $508.

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 paid for the oil. “Thevolume of imports will not be affected but this will lead to the firmingup of domestic edible oil prices," said B. V. Mehta, executive director ofthe Solvent Extractors’ Association of India.

Mehta said the move will help farmers realise better prices for their justharvested oilseeds crop being marketed now.

The government also raised the prices of RBD palm oil to $436 a tonne from$420, other palm oil to $431 from $411, crude palmolein to $438 from $418,RBD palmolein to $447 from $430 and other palmolein to $443 from $424.Traders said while the increase in the base price of crude soybean oil wasin line with existing market prices, the tariff revision on palm oils wason the higher side.

"The ratio of imports of palm and soy oils will be slightly altered," saidone trader. Sandeep Bajoria, chairman of the Central Organisation for OilIndustry and Trade, said the tariff on crude palm oil has been fixed atvery high levels and would be detrimental to the domestic processingindustry.

"This needs a correction," he said. "Some reduction in volumes of crudepalm oil imports is possible.” The country imports about 150,000-200,000tonnes of crude palm oil every month. India’s imports currently comprise60 percent palm oils and 40 percent soybean oil.

At 0950 GMT, November soyoil at the Multi Commodity Exchange was quoted at365.60 rupees per 10 kg, up 0.85 rupees. October contract at the NationalCommodities and Derivatives Exchange was up 1.15 rupees to 363.15 per 10kg. reuters