The government of India has cut import duties on crude and refined palm oil from the Southeast Asian nations. The country at present imports 60% - 15.5 million tonnes yearly — of its edible oil requirements, mainly from Indonesia, Malaysia, Argentina and Ukraine.
The duty on crude palm oil from Indonesia, Malaysia and other members of the Association of South East Asian countries was reduced to 40 % from 44 %, whereas the tax on refined palm oil was cut to 45 % from 54 % if imported from Malaysia and to 50%, if purchased from Indonesia or other Asean nations, said the Ministry of Finance.
As per the industry, the duty reduction would cause increased palm oil imports but it was too early to say if consumers in the country would benefit. The Solvent Extractors Association said that the duty reduction, effective from 1st January, would have an impact on the domestic palm oil refining industry and also hit oil palm farming. The industry pegs India’s edible oil consumption at 23.5 million tonnes for the year 2018 to 2019 and expects to import 15.5 million tonnes, with 60% from Indonesia and Malaysia, followed by soyabean oil from Brazil and Argentina, sunflower oil from Russia and Ukraine and canola oil from Canada.
The association said with 8 million tonnes of palm oil imported per annum, the domestic production was just 3,00,000 tonnes.
President of Solvent Extractors Association, Atul Chaturvedi said, “Government’s decision is contrary to the ‘Make in India’ initiative and would critically stymie the efforts at improving palm farming in India. This will also hurt the interests of the oilseed grower who was lately getting enthused with relatively high import duties. We hope the government realises the situation and take proper steps to save oil palm plantations as well as palm oil refiners”.
Chief executive officer of oil consultancy firm Sunvin Group, Sandeep Bajoria said as the rupee has strengthened to Rs 69.50 from Rs 74.40 against dollar and global markets at a 6 to 7 year low, prices of edible oil were at the lowest.
