New Delhi: The Centre lowered import duty on refined soy oil and refined sunflower oil to 12.5 per cent from 17.5 per cent, in effect from Thursday, the government notification stated, the move was done to lower the local prices.
Impact
After this considerable step, now all crude oils like palm oil, sunflower oil and soya oil will have to pay a 5 per cent import duty, which means a total tax incidence of 5.5 per cent. When it comes to refined edible oil, the effective import duty is 13.75 per cent. The import duty for refined oil will be 12.5 per cent in addition to the 10 per cent cess levied on import duty.
“Even with lesser duty difference between crude and refined soya and sun oils, chances of shipment of refined soyoil or sunflower oil is not commercially viable but may have some temporary sentimental impact on market,” said the Executive Director of the Solvent Extractors’ Association of India (SEA) BV Mehta to Mint.
The latest data by the Solvent Extractors’ Association of India (SEA), India’s import of vegetable oils (edible and non-edible) in April saw a decline by 10 per cent, whereas, palm oil import declined by 31 per cent to 505,000 tonnes. On the other hand, soybean oil import was up by 1 per cent to 262,000 tonnes and sunflower oil import witnessed growth by 68 per cent to 249,000 tonnes due to the oversupply at the lowest international price compared to soybean oil and crude palm oil.
The total delivered cost for crude palm oil (CPO) at Mumbai port was noted at $860 a tonne as on 2 June against $1,5557 the previous year during the same time. At the same time, the figures for crude soy oil were at $970 in comparison to 41,686 with sunflower oil being at 4860 compared to $1,941 per tonne.
On the other front prices of refined soy oil were at Rs 90,000 per tonne and sunflower oil at 92,000 a tonne.
During the corresponding period a year back, prices for refined soy oil were at Rs 1.4 lakh and sunflower oil at Rs 1.7 lakh per tonne, as per SEA data.
India when it comes to vegetable oils is the world’s biggest buyer and relies heavily on imports for about 60 per cent of its annual consumption of 24 MT. From total imports of 14 MT of India’s edible oil whole year, the share of crude oil and refined oil is 75 per cent and 25 per cent respectively.
