By Rajendra Jadhav
MUMBAI (Reuters) - India's government on Thursday raised import tax on crude and refined soyoil, sunflower oil and canola oil to the highest level in more than a decade, as the world's biggest edible oil importer tried to support local farmers.
The hike will make palm oil competitive in the Indian market and reduce the flow of soft oils like sunflower and canola in coming months, boosting local producers.
India relies on imports for 70 percent of its edible oil consumption, up from 44 percent in 2001/02.
"Imports of palm oil will rise in coming months. Palm was losing market share due to higher duty. Now there is a level playing field," said Sandeep Bajoria, chief executive of the Sunvin Group, a Mumbai-based vegetable oil importer.
It kept the duty on soft oils unchanged, however, making them more competitive in the local market.
The country's palm oil imports in May plunged 38 percent from a year earlier to their lowest in nearly 4-1/2 years as imports of soyoil and sunflower oil jumped, a trade body said on Thursday.
After the duty hike, India's sunflower oil and canola oil imports could moderate, while soyoil imports remain largely unchanged, Bajoria said.
Weak exports pulled Malaysian palm oil futures to the lowest level in more than 22-months on Wednesday.
(Reporting by Rajendra Jadhav; Editing by Alexandra Hudson)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)