NEW DELHI, March 18 (Reuters) - India has extended a ban on export of vegetable oils by a year, a move that traders said was aimed at keeping a lid on prices ahead of general elections in and April and May.
The country is the world's biggest importer of vegetable oils after China, but used to sell tiny quantities of groundnut oil to the United States, Europe and China before a ban was imposed last March.
"The government probably took the decision keeping an eye on elections," said B.V. Mehta, executive director of the Solvent Extractors' Association of India (SEA), the apex body of vegetable oil traders.
"It makes no sense. When the ban was imposed last year, prices were too high. Now the prices have drastically come down," he said.
The global benchmark for palm oil in Malaysia, the second largest producer of the vegetable oil after Indonesia, has dropped 57 percent from a record 4,486 ringgit last year as recession sapped demand and made stocks to balloon.
The Directorate General of Foreign Trade said in a statement on its website (http://www.dgft.gov.in/) late on Tuesday the ban had been extended to March 16, 2010. It did not give any reason for the move.
"We were not a regular exporter. Exports took place only off and on. Maximum exports were to the tune of 70,000 tonne in 2003/04 and 2004/05," Mehta said.
India had bought 762,544 tonnes of vegetable oils in February, 48 percent up from a year ago.
Source : REUTERS INDIA