Dec 2 2010 4:10PM
By Shie-Lynn Lim
Of DOW JONES NEWSWIRES
NUSA DUA, Indonesia (Dow Jones)--India, the world's largest consumer of cooking oil after China, is unlikely to restore import duties on edible oils amid fears such a move could raise domestic food prices, an industry official said Thursday.
"The (Indian) government is keen to keep inflation at lower levels, and won't restore taxes on imports, keeping overseas edible-oils purchases cheaper compared with local oils," Govindlal G. Patel, director of vegetable-oils trading company Dipak Enterprise, told Dow Jones Newswires on the sidelines of a regional palm oil outlook conference.
Market participants have been concerned that expected increases in oilseed production in India in the crop year that started Nov. 1 will spur the government to reimpose import duties, which could hurt palm oil sales.
The Solvent Extractors' Association of India late last month said India should impose taxes of 10% tax on crude palm oil and 17.5% on soyoil. The government scrapped a duty on crude palm oil in 2008 and ended a 20 percent tax on crude soybean oil last year, to boost supplies and cool prices.
India depends on overseas supplies of oils to meet its domestic demand. More than half of its edible-oil demand is met through purchases of palm oil sourced from Malaysia and Indonesia, the world's biggest palm oil producer.
Patel said India's growing consumption amid improved domestic oilseed production may keep edible-oil imports in the marketing year beginning Oct. 1 unchanged at 8.8 million metric tons.
Patel also said palm oil shipments to India may slow this month, as palm oil tends to solidify in cold weather, before sales pick up again from next month.
He said palm oil stocks at Indian ports are currently around 450,000 tons.
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