Import taxes on palm, soybean oil may be re-imposed

India, the world’s largest buyer of vegetable oils after China, may consider reinstating import duties on palm and soybean oil to protect oilseed farmers as cheap grades from overseas flood the local market.

A panel of ministers will meet tomorrow to consider the issue, Commerce Secretary G K Pillai said today in New Delhi. The duty on soybean and palm oil was scrapped in April to bolster supplies and cool food prices.

Malaysia-traded palm oil declined 45 per cent this year, lowering purchase costs for India. Cheaper imports are pressuring oilseed prices at a time when farmers are harvesting the monsoon- sown crops of soybean, peanut and sesame.

The government may re-impose the tax after Diwali on October 28, Farm Minister Sharad Pawar said last month.

Edible oil imports rose 14.5 per cent to 4.82 million tonnes in the 11 months ended September 30, according to the Solvent Extractors’ Association. Purchases in September rose 9 per cent to 623,208 tonnes from a year earlier. Palm oil makes up 90 per cent of the country’s total purchases of edible oils.

Harvesting of the monsoon crop, which accounts for more than 60 per cent of India’s oilseed output, began in September. Winter- sown crop, the planting for which will begin next month, makes up for the remainder of the production.

January-delivery palm oil rose 10 per cent to 1,667 ringgit ($473) a tonne on the Malaysia Derivatives Exchange.

India relies on overseas purchases to meet almost half its edible oil demand. It buys palm oil from Indonesia and Malaysia, and soybean oil from Argentina and Brazil.