8/26/04, INDIA (Oilmandi) - The Centre is considering cutting base importprices of palm oils and crude soya oil to control record high inflation,officials said. Inflation surged to a new 3-1/2-year high of 7.96% in theweek ended August because of rising fuel and commodity prices, which havetracked global trends.

The government fixes base prices to check revenue loss due tounder-invoicing by some importers. Traders pay import duties on basevalues, irrespective of the price at which they buy oils. A cut in baseimport prices leads to a fall in domestic prices of oils as importers paylower duties.

We are planning to review base prices. It will be done in a day or two, asenior finance ministry official, who did not want to be identified, said.But the government has no plans to cut customs duties on edible oils, hesaid. India imports nearly half of its annual edible oil needs of morethan 10m tonnes. It buys palm oil from Malaysia and Indonesia and soyabeanoil from Argentina and Brazil.

Officials said the government was also exploring the possibility ofcutting base import prices of vegetable oils, a mass consumption item, inline with a fall in global prices.

Traders said edible oil prices have dropped more than 10% from existingbase price levels and there was a need to lower them. Crude palm oil isquoted at about $412 a tonne CIF (cost, insurance and freight) at Indianports, down from the current base price of $504. It was traded at around$410 a tonne a month ago.