30/09/05 Chennai , (Business Line) - THE Centre on Friday raised the baseimport price on which it works out the customs duty for palm group of oilsand crude soyabean oil by $2-5 per tonne.

But the increase, coming close on the heels of a cut in the base pricealso called tariff rate on September 16, had little impact on either thedomestic or global markets with prices remaining unchanged. In terms oflanded price without taking into account the freight charges, the hikewill have minimum effect. (See table)

According to a notification issued by the Ministry of Finance, the tariffrate for palm oil has been increased by $5 to $402 per tonne and for RBD(refined bleached and deodorised) palm oil, it has been raised by $2 to$420. For other palm oils, the rate is up $3 to $411, and for crudepalmolein, it is up $4 to $418. For RBD palmolein and other palmolein, ithas been increased by $3 each to $430 and $424, respectively, while forcrude soyabean oil the tariff has been raised by $2 to $508.

The tariff rate has been increased in line with the rise in globalvegetable oil prices. On September 16, it was cut after a gap of sixmonths in tune with the global prices.

"The increase in the tariff rate will have no impact on the prices orimports," said Mr B.V. Mehta, Executive Director, Solvent ExtractorsAssociation of India.

Though the decision of the Centre to increase the tariff rate has beensudden, the market had been abuzz with such a move since the morning,according to trading sources.

"The Centre should announce a criteria for revision of tariff rates forbetter transparency. It will clear rumours and confusion in the market. Ithas to come at a specific date as requested by the industry," Mr Mehtasaid.

In the global market, only the news that Europe's demand for vegetable oilfor fuel needs is rising drove the prices. In Kuala Lumpur, crude palm oilclosed higher at $387 per tonne, while RBD palm oil was up $2 at $410. RBDpalmolein also gained at closed at $420, while crude soyabean oil wasquoted at $465 in Rotterdam.

However, the domestic crude soyabean oil ruled flat at Rs 323 for 10 kg,while groundnut oil closed at Rs 520. Sunflower oil and palmolein alsoended unchanged at Rs 400 and Rs 362, respectively.

According to market sources, the Centre could have raised the tariff asthe cut earlier this month was seen as a move that would affect theoilseed growers when harvest of kharif crop was due. Kharif crops havebegun arriving in the market and arrivals are set to gather pace in thenext couple of weeks.

The cut on September 16 was seen having a bearish effect on oilseed pricesand it was feared that it could affect rabi sowing also what with theNational Agricultural Cooperative Marketing Federation have a20-lakh-tonne mustard stock. "But this increase will not help the growerstoo," Mr Mehta said.