India's vegetable oil traders have urged the government to impose an import tax and allow futures trading in soyaoil following a slump in prices, a leading trade body said on Thursday. India, the world's biggest vegetable oil importer after China, in April scrapped a 20 percent import duty on crude edible oils and cut the levy on refined oils to 7.5 percent from 20.75 percent to control inflation.
The Solvent Extractors' Association of India (SEA) said in a letter to the farm, finance and trade ministers the government should impose a 30 percent import duty on crude palm oil, 37.5 percent on RBD palmolein and 20 percent on crude soyabean oil. The SEA, the apex body of vegetable oil traders, also asked the government to allow exports of edible oils and resumption of futures trade in soyaoil. The government banned exports of edible oils in March for a year despite tiny sales of groundnut oils and has halted futures trading in soyaoil until November.
Benchmark Malaysian crude palm futures dropped to their lowest in nearly two years on Thursday after crude oil hit a new 13-month low amid worries that an accelerating economic slowdown will cut demand, traders said.
The January contract the Bursa Malaysia Derivatives Exchange fell 99 ringgit, or 5.66 percent, to 1,649 ringgit ($468) per tonne by midday. The contract earlier fell as low as 1,620 ringgit a tonne, the lowest since October 20, 2006. India imports almost half of its annual edible oil requirement of around 11 million tonnes in the form of palm oil from Malaysia and Indonesia, and soyaoil from Brazil and Argentina.