31/10/2007 (Reuters), New Delhi - The government’s decision to stop the import of palmoil at a southern port following lobbying by the rival coconut trade has helped stabilise coconut prices and bring the two oils to price parity.

India buys palmoil mainly from Malaysia and Indonesia.

The directorate general of foreign trade, a wing of the trade ministry, stopped palmoil imports at Kochi port in southern Kerala state -- where 70,000 tonnes to 80,000 tonnes arrive annually -- two weeks ago.

"The prices of coconut oil are now moving around 46 rupees ($1.17) per kg. It is not going down after the decision," said a senior official of the state-run Coconut Development Board, who did not want to be identified.

Coconut oil prices have steadily fallen from about 72 rupees per kg over the last two years.

Packaged palmoil prices in southern India are now ruling at about the same level as coconut oil, which is considered a premium oil used for cooking as well as toiletries

Imports are permitted at all other Indian ports, but the Kochi ban has increased transport costs to Kerala.

Other edible oil industry officials criticised the ban.

"We have protested. It is not proper to selectively ban imports through particular ports," said Ashok Sethia, president of the Solvent Extractors' Association of India.

"There should be one rule for the whole country," he added. "The idea behind the move is to popularise coconut oil at the cost of palm or soy oils. It should be revoked."

Coconut oil officials said the move was needed to maintain prices as good monsoon rains in southern India were likely to lead to a healthy yield during the crop year ending June 2008, pushing up supplies.

"The government may also step in with some measures to help the local farmers," the Coconut Development Board official said.

Another southern state, Andhra Pradesh, had been considering whether to ban palmoil imports, but has not taken any decision.