Indian soyaoil futures were marginally down on Friday on expectations the government may reduce base import prices used to calculate tariffs while sugar prices were down on bumper crop prospects.
Gold prices rose tracking global markets and wheat was down because of lack of demand. October soyaoil at the National Commodities and Derivatives Exchange lost 0.35 rupees to 366.60 rupees per 10 kg.
October soyaoil at the Mullet Commodity Exchange (MCX) was down 0.05 rupees at 366.05 per 10 kg. "The market is down as there is strong market talk that the government is likely to reduce import base prices," one trader said from Indoor, the hub of the soyabean trade in central India.
India fixes base prices to calculate customs duties to prevent loss of revenue due to under-invoicing by some importers. Traders pay import duties on base values irrespective of the prices paid for the oil.
Officials of the finance ministry, which decides tariff value changes, declined to comment. India, the world's largest edibles oil buyer, imports nearly two-fifths of its annual vegetable oil needs of around 11-12 million tonnes.
It mainly buys palm oil from Malaysia and Indonesia and soyaoil from Argentina and Brazil. Sugar prices were down as the country is expecting a bumper cane crop in the New Year beginning October.
September sugar at NCDEX lost 1 rupee to 1,815 per 100 kg. The October contract fell 3 rupees to 1,816 rupees. "Now movement in the sugar market will depend on how much we export next year," said on dealer.
India's sugar output is expected to rebound to about 17 to 18 million tonnes in the year through September 2006, after falling to about 13 million tonnes this year.
Indian millers imported about 2 million tonnes of duty-free raw sugar in the past two years under a government scheme, with a commitment they would export an equal quantity of refined sugar in two years.
Traders say mills need to export about 500,000 tonnes of sugar in the next crop year under the scheme. Wheat prices were down as demand in the physical market fell after widespread monsoon rains.
"Wheat price are expected to rise from next month when the monsoon season is over," one New Delhi-based trader said. The September contract at NCDEX was down by 1 rupee at 760.40 rupees per 100 kg. October contract fell 1.20 rupees to 771.40.
Indian gold futures rose because the yellow metal hit a new high for 2005 in Asia as a weaker US dollar prompted renewed buying from investors that moved it to within $1 of a 17-year peak.
October gold at MCX was up 35 rupees at 6,539 per 10 grams. December gold rose 29 rupees to 6,572. Spot gold rose to $457.80/458.50 an ounce, from $455.10/455.80 last quoted in the US market.
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