Malaysian palm oil futures rose 2 percent on Tuesday, a second consecutive session of gains on stronger export demand and expectations of weaker production.
NEW DELHI: India's cabinet approved on Wednesday doubling state purchases of oilseeds and pulses from farmers, in a bid to boost local output and prevent distressed sales.
The amount that state agencies guarantee to buy at pre-set prices will double to 190 billion rupees (US$2.9 billion) for a five-year period ending in 2021/22, government spokesman Frank Noronha said in a tweet.
India is the world's biggest edible oil buyer and frequently imports pulses, or lentils, because many Indian farmers tend to swing from one commodity to another depending on government incentives, leading to oversupplies one season and shortages in the next.
The government has been seeking ways to encourage farmers to invest in those commodities.
"This will help in protecting the farmers producing these commodities from making distressed sales during peak arrival periods and to provide remunerative prices with a view to encourage higher investment and production ...," Noronha said.
Prime Minister Narendra Modi has been trying to cut India's edible oil import bill of more than $10 billion a year, but consumption has far outpaced demand in the country known for its love for deep-fried food. (http://reut.rs/2F3bpZ8)
India imports vegetable oils mainly from Malaysia, Indonesia, Brazil and Argentina. Pulses are bought from Australia, Russia, Tanzania, Canada and the United States. ($1 = 65.1550 Indian rupees). - Reuters
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