Indian soy futures continued to slide on Friday on market talk that the government was considering a cut in customs duties of crude palm oil while gold and sugar were steady. Wheat gained slightly on tight stocks.
Palm oils and soy oil compete for the same markets. India buys nearly half its annual needs of around 11 million tonnes in the form of palm oils from Malaysia and Indonesia and soft oils from Argentina and Brazil.
By 0820 GMT, November soyoil at the Multi Commodity Exchange (MCX) was down 1.85 rupees at 354.95 per 10 kg. The National Commodities and Derivatives Exchange December contract lost 1.80 rupees to 359.15.
"Rumours of changes in customs duties on palm and revision of base prices on oils are bringing down the soy market," said a Mumbai-based broker. "There is no other factor."
New Delhi last amended base prices on October 15, raising prices for palm and soy oils across the board. These determine the tax importers pay. Indian traders said there was speculation the government could reduce the customs duty on crude palm oil to 65 percent from 80 percent. Gold futures were steady in line with global prices. The metal held near New York levels in thin Asia trading on Friday, while platinum group metals were mixed after scaling new highs on fund buying.
December gold at the MCX gained 3 rupees to 6,906 per 10 grams. February gold was flat at 6,920.
Spot gold was steady at $473.50/474.25 an ounce in afternoon trade from $473.50/474.30 late in New York, where it rose more than $3 after a weaker dollar sparked fund buying.
Sugar futures were steady. November sugar at the National Commodities & Derivatives Exchange (NCDEX) fell 1 rupee to 1,819 per 100 kg.
Traders said sugar was trading in a narrow range after the government's release of free sale sugar quota for November was on expected lines.