* India taxing crude palm oil imports in a month
* Import tax to be about 20 percent for palm
* India's vegoil imports flat for oil year starting Nov

02/12/2008 (Reuters), NUSA DUA, Indonesia - India, the world's second largest vegetable oil importer, could tax crude palm oil shipments within a month, top industry analyst Dorab Mistry said on Tuesday.

Palm oil, produced mostly in Malaysia and Indonesia, may be the next vegetable oil to be taxed after soyoil as India tries to shore up domestic oilseed prices and please farmers ahead of next year's general elections.

"It will happen. When you say soon, it will be within a month and something will happen," Mistry told Reuters in an interview ahead of a palm oil conference in the resort island of Bali.

"They have given us the indication by a level of 20 percent on soybean oil, so usually we have seen in historical terms, they try to put both (soybean oil and palm oil) at the same level playing field." 

The Solvent Extractors' Association of India (SEA), a vegetable oil traders body, has asked the government to impose a 30 percent import duty on crude palm oil, 37.5 percent on RBD palmolein and 20 percent on crude soybean oil.

Last month, India responded and slapped a 20 percent import tax on crude soyoil, which prompted some traders to say that the move may not be enough to aid vegetable oil prices, hit by a sharp drop in benchmark prices in Malaysia.

In April, when inflation soared, India slashed the levy on refined oils to 7.5 percent from 20.75 percent and cut duties on all crude vegetable oils to zero.

Mistry, a director of India's commodities-to-appliances firm Godrej International Ltd, will present a paper on his price forecasts on vegetable oils on Thursday.

The benchmark February palm oil contract KPOc3 on the Bursa Malaysia's Derivatives Exchange settled down 25 ringgit, or 1.54 percent, after falling 4.17 percent to a low of 1,560 a tonne due to depressed crude oil prices. [POI/]

IMPORT TAX FEARS LEAD TO OVERIMPORTING
Fears that the government would impose taxes on vegetable oil shipments at the end of this year have prompted Indian importers to stock up.

"India has overimported in September and October because of the anticipation of import duty," said Mistry, who is head of vegetable oils purchasing in Godrej. "Everybody imported thinking that once the duty comes, prices will rise so that they make money. People must be disappointed at the moment."

Vegetable oil imports in October rose 24 percent to 827,000 tonnes against the same month last year while September saw a 40 percent jump to 623,208 tonnes, industry data showed.

India, the world's biggest vegetable oil importer after China, buys almost half of its annual edible oil requirement of around 11 million tonnes -- mainly palm oil from Malaysia and Indonesia, and soyoil from Brazil and Argentina.

"I would estimate that (vegetable oil) imports next year are between 5.5 to 6 million tonnes from November to October," said Mistry, adding that there would be little growth from previous year.

Mistry the lack of growth could be due to India's 1.1 billion population curtailing spending due to the deepening economic crisis.