Indian gold rises, soyaoil down on base price hopes

30 Dec, 2005

Indian gold futures rose on Thursday, tracking global markets, and soyaoil slipped with traders expecting the government to lower base import prices, brokers said.
February gold on the Mullet Commodity Exchange (MCX) was up 29 rupees to 7,651 rupees per 10 grams. April gold was up 36 rupees to 7,702 rupees.
Gold firmed in Asia despite a rise in the dollar as investors bet bullion's recent strength would continue as the year drew to a close.
Historically, a strong US dollar encourages gold sales in foreign currencies because gold is priced in dollars.
However, spot gold stood at $516.90/$517.65 an ounce, up from $513.70 in late New York on Wednesday. It hit $540.90 in December, it's highest in almost 25 years.
Soyaoil futures slipped in India, the world's largest edible oil importer, as traders expected the government to lower base import prices.
The January soyaoil contract on MCX fell 2 rupees to 338.80 rupees per 10 kg. "The government is likely to cut base prices by around $20 to $30 a tonne in line with global prices," said one New Delhi-based trader.
"The markets are factoring in the reduction." India fixes base prices to calculate customs duties and prevent loss of revenue due to under-invoicing by importers.
Traders pay import duties on base values irrespective of the prices paid for the oil.
The country buys nearly half its annual needs of about 11 million tonnes in the form of palm oils from Malaysia and Indonesia and soft oils from Argentina and Brazil.
Sugar futures fell in low volume with the April contract at the NCDEX down 8 rupees to 1,913 rupees.
Wheat futures fell marginally. The January wheat contract was down 1.2 rupees at 808.00 rupees.

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