By Mayank Bhardwaj
NEW DELHI, Nov 4 (Reuters) - India should impose a 10
percent tax on crude palm oil imports to protect its farmers and
the industry from cheap imports, a leading analyst said on
Many trade and industry officials fear that India, the
world's biggest importer of vegetable oils, could hike imports
as inventories surge in top producers Indonesia and Malaysia.
Falling benchmark Malaysian prices could also lead to higher
purchases from India, they say.
"It is important for the Indian government to think in terms
of some small protection, say a 10 percent import duty on crude
palm oil, to protect India's poor oilseed farmers," Dorab
Mistry, director at Godrej International Ltd, told an industry
conference in New Delhi.
India's edible oil imports are likely to rise more than 4
percent to 10 million tonnes in the 2012/13 (November-October)
marketing year as domestic output lags rising demand.
"Indian inflation will soon come under control. Once that
happens, it will be necessary to levy a small import duty on
unrefined vegetable oil imports," Mistry said.
Wholesale price inflation is running at around 7.8 percent.
Currently India allows tax-free imports of crude vegetable
oils and imposes 7.5 percent duty on refined varieties. Palm oil
constitutes about 80 percent of India's cooking oil imports.
But India should avoid taking frequent administrative
measures such as increasing or lowering import levies and should
focus on raising productivity of oilseeds, said Thomas Mielke,
who heads Germany's Oil World publication.
Malaysian stocks rose to a record high of 2.48 million
tonnes in September, data from the Malaysian Palm Oil Board
Malaysian palm oil prices have dropped 21 percent so far
this year as stocks rise in Indonesia and Malaysia and demand
slumps due to the economic slump.
On Friday, benchmark Malaysian palm oil futures closed at
2,496 ringgit a tonne, down 1.6 percent.
India used to import crude palm oil from Indonesia, the
world's biggest producer. But New Delhi turned to Malaysia after
Indonesia cut export taxes for refined palm oil to encourage its
own processing industry and limiting sales of crude palm oil.
Both Indonesia and Malaysia will have record stocks of palm
oil at the start of next year, while South American soybean
output will rise in the first three months of 2013, Mistry said.
India looks likely to harvest a good rapeseed crop, he said.
Farmers in India plant rapeseed, the main winter-sown
oilseed, from October and harvest starts in March.
(Editing by Jeremy Laurence)