By Asia Samachar | India |
India has hiked import tax on palm oil and other edible oils by 20%, effective today (Sept 14), in a move seen as helping local oilseed farmers.
Basic customs duty on crude palm oil, soybean oil and sunflower oil has been increased from zero to 20% and from 12.5% to 32.5% for refined products, according to the government notification.
India is the world’s top importer and second largest consumer of edible oils. More than 70% of its vegetable oil demand is imported mainly through palm oil mainly from Indonesia, Malaysia and Thailand as well as soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
An Indian trade group had sought an import duty hike on edible oils to support “remunerative price” for local oilseed farmers, according to Bernama.
Facing pressure from farmers in the soybean-producing states of Maharashtra, Karnataka and Madhya Pradesh, the federal government earlier approved soybean procurement at the state-fixed minimum support price (MSP) of 4,892 rupees (US$58.3) per quintal (100 kg). The wholesale prices of soybean had fallen between 3,200 and 3,700 rupees in August, according to reports.
The move could lift edible oil prices and dampen demand and subsequently reduce overseas purchases of palm oil, soyoil and sunflower oil, reports the Reuters.
The wire agency reported in late August that India was considering an increase in import taxes on vegetable oils to help soybean growers ahead of regional elections due in Maharashtra later this year.
After a long time, the government has been attempting to balance the interests of both consumers and farmers, Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage, told the news agency.
The move has increased the likelihood of farmers receiving the minimum support price set by the government for their soybean and rapeseed harvests, he said.
India’s edible oil imports consist of more than 50% palm oil, so it’s obvious that the Indian duty hike is going to have a negative impact on palm oil prices next week, said a New Delhi-based dealer with a global trade house.
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