Centre reduces import duty on edible oils

The Centre has reduced the customs duty on edible oil imports by up to 10 per cent with immediate effect. According to the industry, the move would have a negative impact on farmers.

The import duty on palm products have been reduced by 5 per cent, while that of sunflower oil has been reduced by 10 per cent. With the current duty reduction, the importers would need to pay only 52.5 per cent as duty against the earlier 57.5 per cent on RBD palmolein. The duty on crude palm oil (CPO) has been reduced to 45 per cent from 50 per cent earlier, while soybean oil imports would attract a duty of 40 per cent now from the earlier 45 per cent. Similarly, the applicable import duty on sunflower oil stands at 40 per cent now from 50 per cent earlier.

B V Mehta, executive director of Solvent Extractors' Association of India, said that the current duty cut would have a negative impact on farmers and some of them may migrate to other remunerative crops. With the edible oilseeds sowing going in full swing, currently, it would have been better to 'wait and watch', he added.

If the announcement had come a little late, the acreage under oilseeds would have gone up substantially.

The government decision may have been prompted by the rising edible oil prices, and would help to check prices to a certain extent, said an industry source.

According to government estimates, the acreage under oilseeds jumped 8.8 per cent to 9.51 million hectares (23.5 million acres in the full year) this monsoon, including peanut and soybean, as of July 12.

The farmers, industry sources said, had turned to oilseeds cultivation because of high remuneration this year, especially with prices rising across the globe from usage in biodiesel production. Higher oilseeds production as a consequence of extra sowing areas would reduce the dependence on imports from countries like Malaysia, Indonesia, Brazil and Argentina.