India's decision to impose new rules on the imports of genetically modified foods is likely to hit soyaoil shipments and firm up domestic edible oil prices, traders said on Friday.
The Indian government in its annual foreign trade policy on Friday made it mandatory for all genetically modified products to carry a declaration from the exporter.
"While making such imports, product s... will have to carry a declaration stating that the product is genetically modified," Commerce and Industry Minister Kamal Nath said.
Soyaoil prices jumped on the domestic futures exchanges as trade expected a slowdown in soyaoil imports into India, the world's second largest edible oil buyer.
The April soyaoil contract at the National Commodities and Derivatives Exchange (NCDEX) was 6.15 rupees up at 383.50 per 10 kg at 1238 GMT, while the Multi Commodity Exchange (MCX) April contract rose 5.55 rupees to 373.
"There will be some dislocation in soyaoil imports as these would require a certification and there will be delays," said Atul Chaturvedi, president of Adani Exports Ltd, the country's leading edible oil importer.
"Domestic soyaoil prices have already firmed up and we expect the market to go up further."
Traders said India's soyaoil imports are expected to be lower by around 300,000 tonnes than the earlier estimates of 2 million tonnes in the year to March 2007.
"Palm oil will gain as soyaoil imports will be now become difficult," Sandeep Bajoria, president of Central Organisation of Oil Industry and Trade.
India, which imports 40 percent of its annual needs of 11 million tonnes of edible oil, buys palm oil from Malaysia and Indonesia and soya oil from Brazil and Argentina.
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