The Hindu Business Line : Tariff value on crude soyabean oil reduced

THE Centre has cut the base import price or tariff value for import of crude soyabean oil to $628 a tonne from $702. The downward revision follows sharp fall in global edible oil prices for quite sometime.

Though a section of the trade sees the move as favouring the purchase of soyabean oil, others feel that further cut in the tariff value is likely.

``Currently, f.o.b prices for crude soyabean oil are around $460 a tonne and including freight, it could be around $510. That means, there is a difference of over $100 between the tariff and the actual price in the global market. Therefore, we feel there is enough ground for further cut,'' an analyst said.

The base import price is fixed as a value on which customs duty for edible oil imports are levied. The Centre has fixed the tariff value in order to avoid under-invoicing of bills.

Currently, crude soyabean oil attracts 45 per cent duty. For crude palm oil, the duty is 65 per cent and for RBD palm oil it is 70 per cent. A duty of 75 per cent is levied for import of refined oils.

Edible oil prices have been on the decline mainly on China's decision to curtail purchases. Last week, it was reported to have cancelled purchases palm oil, leading to widespread fall in all edible oil prices. Later, traders said China was deferring its purchases.

Hopes of a recovery in the US soya crop are also acting as a damper for the prices.

A fall in imports into India is also another factor in softening of the prices. A good oilseeds crop, both in kharif and rabi, is witnessing a fall in import of edible oils. For the current oil year (Novermber 2003-October 2004), the crop has been projected at 238.8 lakh tonnes against 154.4 lt last year.

Meanwhile, the tariff value for the palm group of oils remains unchanged. The Centure had fixed a tariff value of $504 a tonne for crude palm oil, $543 for RBD palm oil, $532 for crude palmolein, and $552 for RBD palmolein. The tariff value for the palm group of oils was revised in November last.