Palmoil, soyoil import price hiked

The government today revised the import tariff value - the base price at which import duty is levied - on palmoils and crude soyoil. While the duty on palm oils was raised by $2-8 a tonne, that of crude soyoil was cut by $5 a tonne.

Market players say the impact of value revision is marginal on the imported price of the commodities.

"While imported soyoil is likely to become cheaper by Re 1 a kg, crude palm oil prices will rise by about Rs 2.88 per kg," said Rajini Panicker, head - commodities research, Refco Commodities.

The benefit is unlikely to be passed on to the retail edible oil consumer, for this cut basically helps remove disparity between prices of imported and local edible oils, Sandeep Bajoria, president, Central Organisation of Oil Industry and Trade.

Seemingly, duty revision is now coming in on a fortnightly basis - on the 15th and the last day of the month - and this schedule has been followed for two months now, traders said. If the pattern is followed, this is likely to keep the market away from undue speculation.

However, most tariff values still are not in sync with the prevailing international prices. "Especially in case of soyoil, this is likely to further weaken domestic prices as the market is struggling with an oversupply situation," said a Mumbai-based trader.

The government sets the tariff value on palm and crude soybean oils. Tariff value changes are administered in tandem with a minimum 10 per cent change in international prices.

On the impact of tariff cut, traders and analysts feel it is unlikely to have much impact on the current prices as the market already has discounted it, traders and analysts said.

Further, the revision was lower than market expectation.