The Hindu Business Line : Centre cuts tariff values for palm group of oils

The Centre on Wednesday cut the tariff values for palm group of oils by $3 a tonne but raised it for de-gummed (crude) soyabean oil by $19. The cut in tariff values in palm group of oils comes after they were raised twice in a month.

On the other hand, this is the second time in a month that the tariff values for soyabean oil are being raised. On May 16, the tariff value for the soft oil was raised by $22.

The tariff value is the base price on which the customs duty for various vegetable oils is worked out. While the effective duty on import of crude soyabean oil is 50.8 per cent, it is 88.8 per cent in the case of palm oils.

With the current revision, crude palm oil tariff value is $430 a tonne, while that for crude soyabean oil is $559.

According to trade sources, currently imported crude soyabean oil is quoted at $532 a tonne in the domestic market.

"The rates till now reflected the price of South American soyabean oil. But the current hike in soyabean oil tariff probably indicates that the Centre is keen on ensuring that the prices of the US market are reflected. US is the largest soyabean oil producer. There have been some discussions in this regard," the sources said.

However, the hike in the soyabean oil tariff is seen as positive for the growers.

"The hike will help growers to go in for oilseed during the ensuing kharif season. Kharif oilseed sowing is due in fortnight's time and with prices of grains looking remunerative, the Centre would be keen to ensure that oilseeds growers do not shift to grains," the sources said.

Also it could help the National Agricultural Cooperative Federation (Nafed) to sell the mustard stocks it has procured from the farmers to industrial units, according to them.

On the other hand, the cut in palm group oils tariff values is seen as having minimum effect.

On Wednesday, crude palm oil for August delivery was quoted at $397.65 a tonne, up $1.37 on stronger soya market in the US. RBD palm oil for July-September quarter was quoted at $415 a tonne f.o.b, while RBD palmolein at $420.

In the domestic market, RBD palmolein was quoted Rs 3 up at Rs 400 for 10 kg, while crude soyabean oil was unchanged at Rs 380.

More Stories on : Agricultural Policy | Oilseeds & Edible Oil

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Centre cuts tariff values for palm group of oils