27/12/2007 (The Economic Times), New Delhi - India has extended a ban on the import of palm oils to all ports in southern Kerala state after lobbying from producers of rival coconut oil, drawing criticism from a leading trade body.

The directorate general of foreign trade, a wing of the trade ministry, had stopped imports at the state's main Kochi port -- where 70,000 tonnes to 80,000 tonnes arrive annually -- in October this year. But in a statement dated Dec. 24 it said all ports in Kerala could no longer be used. "Is it a desirable step in a free market? I don't think it is a solution," said B.V. Mehta, executive director of the Solvent Extractors' Association of India.

"The government should have taken some other measure to support the coconut growers." India buys palmoil mainly from Malaysia and Indonesia. Imports are permitted at all other Indian ports, but the Kochi ban has increased transport costs to Kerala.

In the past two to three months, packaged palmoil prices in southern India have risen tracking global markets but have also been pushed higher by the Kochi ban.

They are now ruling at about the same level as coconut oil, which is considered a premium oil used for cooking as well as toiletries. Coconut oil prices have fallen over the past two years and industry officials said the ban on palm imports was needed as an expected good coconut crop in the year to June would push up supplies.