India, the world's largest edible oil importer, raised the base import price of crude soyabean oil on Wednesday, a move traders said would firm up domestic edible oil prices.
India fixes base prices to check loss of revenue due to under-invoicing by some importers.
Traders pay duties on imports, whose value is calculated using these base prices and not the prices at which they purchase oils.
A Finance Ministry notification said the price of crude soyabean oil has been raised to $710 a tonne from $643.
But it left the base import price of palm oils unchanged. India imports nearly half its annual edible oil needs of more than 10 million tonnes.
It buys palm oil from Malaysia and Indonesia and soyabean oil from Brazil and Argentina. "The market will firm up a bit because of the tariff revision," Govindbhai Patel, a leading edible oil importer, said from Rajkot, the hub of the country's oilseed trade.
Patel said currently it was cheaper to import palm oil than soyabean oil and only old contracts were being fulfilled.
"The tariff increase will have an overall impact on the edible oil market immediately but the prices might come down a few days later depending on demand and supply of soyaoil," said Rajesh Agarwal, chairman of Indore-based Soyabean Processors Association of India.
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