Govt May Go In For Another Cut In Edible Oils Import Duty

Mumbai: The Government is likely to slash import taxes on the edible oil for a second time in five weeks to boost supplies and curb inflation that's at a two-year high. Rising prices of farm and manufactured goods have become a danger for the Congress party-led coalition as it prepares to face seven state elections this year. The government is stocking up wheat, sugar, pulses to augment supplies and keep inflation at below 4 per cent. Lower import taxes by India likely to shore up gains in palm oil prices in Malaysia and soybean oil in Chicago, analysts said. Palm and soybean oil futures have each risen almost 20 per cent in the past six months on increased demand for oilseeds to make into alternative fuels. Palm oil on the Malaysia Derivatives Exchange advanced 0.5 per cent to 1,934 ringgit. The commodity averaged 1,559 ringgit ($445) a tonne last year. Prices of refined bleached and deodorised palm oil have gone up 17% in the past year on the National Commodity & Derivatives Exchange to Rs 440 per 10 kilograms. Refined sunflower and peanut oils have each gained 19 percent in the past six months on the Multi Commodity Exchange of India. The key inflation rate rose to a two-year high of 6.73 per cent in the week ended February 3.