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Govt cuts import duty on wheat, potato and palm oil

Edible oil import duty cut despite kharif production set to rise 40% in 2016-17

To keep prices of essential commodities under check ahead of the festival season, the Centre on Friday lowered the on to 10 per cent from 25 per cent at present, while that on crude and refined was brought down by five percentage points each to 7.5 per cent and 10 per cent, respectively.

The on potatoes, too, was brought down to 10 per cent from 30 per cent before. The duty on has been lowered despite the Centre expecting kharif oilseeds production to rise 40 per cent, raising doubts about the estimates.

BOOSTER DOSE
Source: Government of India

Business Standard had reported on September 10 that the Centre was mulling such a move.

Wheat
Ironically, the on has been cut despite the fact that India harvested 93.50 million tonnes (mt) of in 2015-16, which is 7 mt more than the previous year's. Trade sources said if the Centre had not lowered the import duty, there could have been acute shortage of flour during the coming festival season as flour mills were left with little stock.

During the October-March period, most flour mills in India relied on government stocks to keep their pipelines healthy, but with the government's own stock being just enough to meet the requirement for the public distribution system (PDS), the flour mills had to depend on imported to keep their mills running.

India's stocks, as on September 1, was 24 mt, while 17 mt was required for till March. The stocks had fallen as procurement by state agencies was to the tune of 22.9 mt, much lower than the 28 mt anticipated.

This left it with just 6 mt of stocks at the end of the season, which was less than the buffer and strategic reserves.

Officials said prices in the open market would soften by Rs 100-150 per quintal because of the latest decision. At present, in south India was being quoted at Rs 2,050 a quintal, while that in the northern parts of the country was selling at Rs 1,800 a quintal.

Already, private traders had imported 1.5-2 mt of before the duty was lowered, but now the total imports would go up to 3-5 mt.

Hailing the decision, Roller Flour Millers Federation of India's secretary, Veena Sharma, said: "This will improve the supply and check price rise."

According to data from the Union consumer affairs ministry, prices in the retail markets of many cities across the country have risen Rs 1-2 a kg in the past two months, while flour rates have moved up by Rs 2-3 a kg.

The Centre in June had extended the 25 per cent on for an unspecified period, but since then, prices have only moved upwards, compelling it to have a relook on the duties.

Potatoes
Concerned over rising retail prices amid a production shortfall, the government reduced the on to improve domestic availability. According to official data, potato output has declined nine per cent to 43.7 mt in the 2015-16 crop year (July-June) compared with 48 mt last year.

Palm oil
In case of edible oil, officials said the retail price of has shown a rising trend in the past few months because of a surge in global markets.

The landed price of crude in Mumbai between August 2 and September 2 has risen 45-52 per cent, while that of refined has gone up by 37-40 per cent. Imported soy oil rates have moved up by 16 per cent during this period.

In the domestic market, packaged soy oil rates have increased Rs 5-7 a kg in the past two months, while that of packaged groundnut oil has become costlier by Rs 5-10 a kg. Packaged and mustard oil, too, has become dearer by Rs 5-15 a kg during this period in most cities across the country.

industry body, Solvent Extractors' Association (SEA) opposed the cut on refined palm oil.

"is not contributing to inflation. However, if the government was so much concerned, it should have reduced only on crude and not refined palm oil," said B V Mehta, executive director of SEA.

He said higher duty difference between crude and refined would have encouraged domestic refining.

India is heavily dependent on import of cooking oils and is all set to import A record 15 mt in the current 2015-16 oil year ending October.

image
Business Standard
177 22
Business Standard

Govt cuts import duty on wheat, potato and palm oil

Edible oil import duty cut despite kharif production set to rise 40% in 2016-17

Sanjeeb Mukherjee  |  New Delhi 

Govt cuts import duty on wheat, potato and palm oil

To keep prices of essential commodities under check ahead of the festival season, the Centre on Friday lowered the on to 10 per cent from 25 per cent at present, while that on crude and refined was brought down by five percentage points each to 7.5 per cent and 10 per cent, respectively.

The on potatoes, too, was brought down to 10 per cent from 30 per cent before. The duty on has been lowered despite the Centre expecting kharif oilseeds production to rise 40 per cent, raising doubts about the estimates.



BOOSTER DOSE
Source: Government of India

Business Standard had reported on September 10 that the Centre was mulling such a move.

Wheat
Ironically, the on has been cut despite the fact that India harvested 93.50 million tonnes (mt) of in 2015-16, which is 7 mt more than the previous year's. Trade sources said if the Centre had not lowered the import duty, there could have been acute shortage of flour during the coming festival season as flour mills were left with little stock.

During the October-March period, most flour mills in India relied on government stocks to keep their pipelines healthy, but with the government's own stock being just enough to meet the requirement for the public distribution system (PDS), the flour mills had to depend on imported to keep their mills running.

India's stocks, as on September 1, was 24 mt, while 17 mt was required for till March. The stocks had fallen as procurement by state agencies was to the tune of 22.9 mt, much lower than the 28 mt anticipated.

This left it with just 6 mt of stocks at the end of the season, which was less than the buffer and strategic reserves.

Officials said prices in the open market would soften by Rs 100-150 per quintal because of the latest decision. At present, in south India was being quoted at Rs 2,050 a quintal, while that in the northern parts of the country was selling at Rs 1,800 a quintal.

Already, private traders had imported 1.5-2 mt of before the duty was lowered, but now the total imports would go up to 3-5 mt.

Hailing the decision, Roller Flour Millers Federation of India's secretary, Veena Sharma, said: "This will improve the supply and check price rise."

According to data from the Union consumer affairs ministry, prices in the retail markets of many cities across the country have risen Rs 1-2 a kg in the past two months, while flour rates have moved up by Rs 2-3 a kg.

The Centre in June had extended the 25 per cent on for an unspecified period, but since then, prices have only moved upwards, compelling it to have a relook on the duties.

Potatoes
Concerned over rising retail prices amid a production shortfall, the government reduced the on to improve domestic availability. According to official data, potato output has declined nine per cent to 43.7 mt in the 2015-16 crop year (July-June) compared with 48 mt last year.

Palm oil
In case of edible oil, officials said the retail price of has shown a rising trend in the past few months because of a surge in global markets.

The landed price of crude in Mumbai between August 2 and September 2 has risen 45-52 per cent, while that of refined has gone up by 37-40 per cent. Imported soy oil rates have moved up by 16 per cent during this period.

In the domestic market, packaged soy oil rates have increased Rs 5-7 a kg in the past two months, while that of packaged groundnut oil has become costlier by Rs 5-10 a kg. Packaged and mustard oil, too, has become dearer by Rs 5-15 a kg during this period in most cities across the country.

industry body, Solvent Extractors' Association (SEA) opposed the cut on refined palm oil.

"is not contributing to inflation. However, if the government was so much concerned, it should have reduced only on crude and not refined palm oil," said B V Mehta, executive director of SEA.

He said higher duty difference between crude and refined would have encouraged domestic refining.

India is heavily dependent on import of cooking oils and is all set to import A record 15 mt in the current 2015-16 oil year ending October.

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Govt cuts import duty on wheat, potato and palm oil

Edible oil import duty cut despite kharif production set to rise 40% in 2016-17

Edible oil import duty cut despite kharif production set to rise 40% in 2016-17 To keep prices of essential commodities under check ahead of the festival season, the Centre on Friday lowered the on to 10 per cent from 25 per cent at present, while that on crude and refined was brought down by five percentage points each to 7.5 per cent and 10 per cent, respectively.

The on potatoes, too, was brought down to 10 per cent from 30 per cent before. The duty on has been lowered despite the Centre expecting kharif oilseeds production to rise 40 per cent, raising doubts about the estimates.

BOOSTER DOSE
Source: Government of India

Business Standard had reported on September 10 that the Centre was mulling such a move.

Wheat
Ironically, the on has been cut despite the fact that India harvested 93.50 million tonnes (mt) of in 2015-16, which is 7 mt more than the previous year's. Trade sources said if the Centre had not lowered the import duty, there could have been acute shortage of flour during the coming festival season as flour mills were left with little stock.

During the October-March period, most flour mills in India relied on government stocks to keep their pipelines healthy, but with the government's own stock being just enough to meet the requirement for the public distribution system (PDS), the flour mills had to depend on imported to keep their mills running.

India's stocks, as on September 1, was 24 mt, while 17 mt was required for till March. The stocks had fallen as procurement by state agencies was to the tune of 22.9 mt, much lower than the 28 mt anticipated.

This left it with just 6 mt of stocks at the end of the season, which was less than the buffer and strategic reserves.

Officials said prices in the open market would soften by Rs 100-150 per quintal because of the latest decision. At present, in south India was being quoted at Rs 2,050 a quintal, while that in the northern parts of the country was selling at Rs 1,800 a quintal.

Already, private traders had imported 1.5-2 mt of before the duty was lowered, but now the total imports would go up to 3-5 mt.

Hailing the decision, Roller Flour Millers Federation of India's secretary, Veena Sharma, said: "This will improve the supply and check price rise."

According to data from the Union consumer affairs ministry, prices in the retail markets of many cities across the country have risen Rs 1-2 a kg in the past two months, while flour rates have moved up by Rs 2-3 a kg.

The Centre in June had extended the 25 per cent on for an unspecified period, but since then, prices have only moved upwards, compelling it to have a relook on the duties.

Potatoes
Concerned over rising retail prices amid a production shortfall, the government reduced the on to improve domestic availability. According to official data, potato output has declined nine per cent to 43.7 mt in the 2015-16 crop year (July-June) compared with 48 mt last year.

Palm oil
In case of edible oil, officials said the retail price of has shown a rising trend in the past few months because of a surge in global markets.

The landed price of crude in Mumbai between August 2 and September 2 has risen 45-52 per cent, while that of refined has gone up by 37-40 per cent. Imported soy oil rates have moved up by 16 per cent during this period.

In the domestic market, packaged soy oil rates have increased Rs 5-7 a kg in the past two months, while that of packaged groundnut oil has become costlier by Rs 5-10 a kg. Packaged and mustard oil, too, has become dearer by Rs 5-15 a kg during this period in most cities across the country.

industry body, Solvent Extractors' Association (SEA) opposed the cut on refined palm oil.

"is not contributing to inflation. However, if the government was so much concerned, it should have reduced only on crude and not refined palm oil," said B V Mehta, executive director of SEA.

He said higher duty difference between crude and refined would have encouraged domestic refining.

India is heavily dependent on import of cooking oils and is all set to import A record 15 mt in the current 2015-16 oil year ending October.
image
Business Standard
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