Soyabean Oil: Tariff Slap To Check Under-Invoicing

The fixation of a base import price (BIP) for crude soyabean oil by the government would check rampant under-invoicing of the commodity but would also give a boost to the oil trade in the country.

The fixation of BIP, or tariff value, on soyabean was expected to curb the activities of unscrupulous importers of soybean oil and exporters in other countries. Crude soyabean oil has been brought under tariff value net with tariff value or base import price fixed at $542 a tonne.

In response, the palm oil trade represented by exporters in Malaysia and importers in India reported firmer prices for Malaysian palm oil futures by midday on Tuesday. Benchmark third-month November futures were up 26 ringgit at 1,481 ringgit ($383) a tonne at the midday break.

Traders said the crude soyaoil base price was higher than the current landed cost of soyaoil in India, making it more expensive than palm oil, its main competitor. The base price of crude palm oil is currently $392 per tonne, RBD palm oil is $414 per tonne, RBD palm olein is $426 per tonne and crude palm olein is $411 per tonne.

The government had used similar data to clamp down on under-invoicing of the palm group of oils in August last year. The Government had also been approached by domestic soyabean processors to fix tariff value owing to low soyabean prices.

The Indore-based Soyabean Processors