India cuts import tax on crude palm oil to 27.5% as food prices rise

India imports around 9 million tonnes of palm oil annually, mainly from Indonesia and Malaysia.

The government  on Thursday the import tax on crude palm oil to 27.5 per cent from 37.5 per cent, aiming to bring down rising food prices with the measure.

India is the world's biggest importer of palm oil. It imports around 9 million tonnes of palm oil annually, mainly from Indonesia and Malaysia.

Edible oils trade groups Solvent Extractors Association (SEA) and Soybean Processors Association of India (SOPA) had earlier urged the government not to tamper with the import duties or encourage state-owned companies to import edible oils at concessional duties in a move to contain domestic prices.

 

SEA said that any policy change to bring down edible oil prices by lowering import duty would send a wrong signal to oilseed farmers as the prices had moved up globally in line with other commodities due to the massive infusion of liquidity in the economies by various governments.

It said that for far too long, the government has kept edible oil prices very low in the country, which has discouraged oilseed farmers, thereby increasing import dependence up to about 70 per cent.

"This price rise will encourage the oilseed farmer to increase acreage and adopt better farm practices," SEA had said.

Latest data shows that sowing of mustard, which is the main oilseed grown during the rabi season has been completed in around 5.22 million hectares of land till November 20, this year, which is 8.83 per cent more than the same period last year.