Import duty on vegetable oils hiked
The Centre has hiked the import duty on crude and refined vegetable oils in a bid to help farmers and the refinery industry.
The basic customs duty on crude oils and refined vegetable oils has been hiked by 5 percentage points to 7.5 per cent and 10 per cent, respectively.
Prior to this, customs duty on crude oils was 2.5 per cent and import duty on refined vegetable oils was 10 per cent. The refinery industry did not seem all that happy with the higher duty.
“We compliment the Government for this move. It, however, does not entirely meet industry’s expectations. We had sought a duty differential of at least 10 percentage points. That has not come,” BV Mehta, Executive Director, Solvent Extractors’ Association of India (SEA), told BusinessLine.
SEA had demanded that import duty on crude oils be hiked from 2.5 per cent to 10 per cent and that on refined vegetable oils from 10 per cent to 25 per cent.
“The import duty differential between crude and refined will continue to be at 7.5 per cent. We had sought 10-15 per cent duty differential,” Mehta said. Consequent to the duty hike, the Centre is expected to mop up at least ₹5,000 crore annually.
This money should entirely be used for oilseeds development purposes and improving productivity, Mehta said.
India had imported an estimated 11.6 million tonnes (mt) of edible oil in the 2013-14 season that ended in October. Shipments were a record against 10.4 mt imported in 2012-13. This season, edible oil imports are expected to rise to a new high of 13 mt.
About 60 per cent of annual edible oil demand of 18-19 mt is met through imports, a significant portion of which is palm oil sourced from Malaysia and Indonesia.
While the move could ensure that prices do not drop further, it could, however, put pressure on vegetable oils, particularly the palm group, in the global market. India is the second-largest vegetable oil importer. Palm group of oils make up over 75 per cent of imports, while refined oils comprise 80 per cent of shipments into the country.
On Wednesday, crude palm oil for delivery in March on Bursa Malaysia Derivatives Exchange rose to month’s high of $635 a tonne. Prices had ruled over $900 a tonne two years ago.
Our Indore Correspondent adds: The Soyabean Processors Association of India (SOPA) has welcomed the hike in import duty on edible oils.
Commenting on the hike, Davish Jain, Chairman, SOPA, said the government has partially acceded to the association’s request for increasing customs duty to check the unabated ever increasing imports of edible oils.
He said the SOPA has also requested the government to create an Oilseed Development Fund by collecting additional ₹3,000/tonne on imported oils, which can be used for increasing oilseed productivity and production for augmenting availability of oilseeds and edible oils.
Import duty on vegetable oils hiked Reviewed by sambasivan srinivasan on 6:34:00 PM Rating: