|Chennai||Rs. 27770.00 (-0.14%)|
|Mumbai||Rs. 29200.00 (2.31%)|
|Delhi||Rs. 27900.00 (-0.36%)|
|Kolkata||Rs. 28270.00 (1%)|
|Kerala||Rs. 27050.00 (-0.37%)|
|Bangalore||Rs. 27550.00 (1.66%)|
|Hyderabad||Rs. 27770.00 (-0.14%)|
* CPO imports seen unlikely to fall drastically
* Refined palm oil imports could increase
* Base prices to be revised on fortnightly basis (Adds details, quotes, background)
By Ratnajyoti Dutta
NEW DELHI, Jan 24 (Reuters) - India has raised the base import price of crude palm oil (CPO) by nearly 80 percent, a move that may neutralise cuts in export duty by producers but boost buying refined oil.
India, the world's top importer of vegetables oils, last week slapped a 2.5 percent import tax on CPO and lifted a six-year-old freeze on base import prices, the benchmark to calculate import taxes of edible oils.
The measures are set to increase current prices of imported CPO by about 1,141 rupees ($21.25) per tonne, traders said.
"Palm oil sellers have already lowered prices by about $20 per tonne reacting to India's move to make imports costlier," said Sandeep Bajoria, chief executive of the Mumbai-based Sunvin Group, an importer of edible oils.
The landed cost of crude palm oil at Mumbai port was quoted at $805 per tonne on Wednesday.
Bajoria said lower prices from palm oil sellers in Indonesia and Malaysia, the world's top two producers of the tropical oil, would keep the impact of the duty hike on local prices minimal.
The Indian government this week raised import duty on gold in a similar effort to curb imports, but here again, Indian appetite is unlikely to be deterred by such small increases, industry experts have said.
India imports about half the 16 million to 17 million tonnes of edible oils it consumes every year, mainly palm oil from Malaysia and Indonesia, and guarantees minimum prices to its farmers to spur production and trim a hefty import bill.
India imported 7.7 million tonnes of palm oils in the year to October, 2012, which included about 6 million tonnes of CPO and 1.6 million tonnes of refined palmolein.
Indian farmers had been calling for action against cheap imports after Malaysia set its export tax on CPO at zero for January and February.
New Delhi had already set up a similar defence on refined palm oil last year after Indonesia cut its export costs.
The latest changes to CPO duties could swing purchases back towards refined palm oil, which continues to carry a 7.5 percent import duty, according to Pradip Desai, managing director of Mumbai-based trading company Palmtrade Services.
"The import configuration is likely to favour purchases of refined palmolein," he said, but added it would depend on future global price movements.
He said palm oil would continue to dominate the country's cooking oil import basket despite the move to make overseas purchases costlier.
"Import duty of 2.5 percent is not that high when compared to duty free import regime in the refined oils," Desai said.
India also set the base import price for crude soyoil at $1,190 per tonne, up from $580 per tonne, making the soft oil imports costlier by about $30 a tonne.
The new base prices became effective from Jan. 23 and will be revised on a fortnightly basis to align with market prices. [$1 = 53.685 Indian rupees] (Editing by Jo Winterbottom and James Jukwey)