Indian ministers will consider on Tuesday whether to raise import taxes on edible oils and allow exports as a slide in global prices threatens local producers, a leading trade official said.
The government in April scrapped a 20 percent import tax on crude edible oils and cut the levy on refined oils to 7.5 percent from 20.75 percent to combat rising prices.
Agriculture Minister Sharad Pawar said last month the government might tax crude vegetable oil imports and lift a ban on overseas sales.
"We all are looking forward to tomorrow's meeting, which is expected to take up long-pending issues like higher duties on vegetable oil imports and allowing exports," said B.V. Mehta, chief of the Solvent Extractors' Association of India (SEA).
India, the world's biggest vegetable oil importer after China, buys almost half of its annual edible oil requirement of around 11 million tonnes -- mainly palm oil from Malaysia and Indonesia, and soyoil from Brazil and Argentina.
Stung by a sharp fall in global prices, some Indian traders have defaulted on import contracts.
The defaults have hurt the world's top suppliers such as Malaysia and Indonesia, already reeling under a high production cycle. Record soybean harvests in China and India, top consumers, have added to the bad news.
As global financial markets regained, the benchmark January palm contract KPOF9 on Bursa Malaysia's Derivatives Exchange on Monday jumped as much as 10 percent to 1,666 ringgit ($473.6), a level unseen since Oct. 21.
Prices are still well below the record of 4,486 ringgit in March.
Government and trade sources, who did not wish to be identified, added ministers were also likely to take a view on scrapping an export tax of 8,000 rupees ($164.2) per tonne on basmati rice.
The government banned exports of non-basmati rice in April and slapped a tax on overseas sales of premium basmati grades to help check rising prices at home. ($1=48.73 rupee) (Reporting by Mayank Bhardwaj, Editing by Mark Williams)