• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• Business Line
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

K.R. Srivats

Centre to factor price movement before review

New Delhi , Sept. 7

The cut in Customs duty on palm group oils, effected a month ago, to cushion the impact of rise in international prices of edible oils on consumers will be effective only up to October 31, a top Finance Ministry official said.

Indications are that the Government will take a call on the import duty rates in the last week of October after factoring in the price movements in both the international and domestic markets.

Customs duty

In mid-August, the Finance Ministry had cut customs duty on crude palm oil, crude palmolein and other fractions of crude palm oil from 80 per cent to 70 per cent. Import duty on refined bleached deodorised (RBD) palm oil, RBD palmolein and other refined palm oils was also reduced from 90 per cent to 80 per cent.

"It has been decided that the duty cuts announced last month (on palm group oils) will not apply after November 1," a senior Finance Ministry official told Business Line here on Thursday.

To review

Asked on the rationale for specifying a terminal date for the recent duty reduction on edible oils, the official said this would give an opportunity for the Union Government to review the price situation including the movement in international prices and take appropriate action on the customs duty front.

It was also pointed out that such dates have been specified by the Finance Ministry for other commodities such as pulses, wheat and sugar.

According to analysts, the review will be done at a time when kharif oilseeds crop begins to arrive in the market. The official, by saying that the duty will be only till October 31, means the previous customs duty rate could be imposed. This, in the view of the Centre, will help farmers get better prices for their produce.

However, if the crop turns out to be lower as is being feared now with groundnut coverage down drastically in Gujarat, then the Centre has the option to keep it at the current level or even cut it.

Also, major festivals would have got over by October 31. This is another reason that could give a handle to the Centre to hike the tariff.

However, this remark has sent a bullish signal to the oils and oilseeds market.

On Thursday, RBD palmolein eased by a rupee to Rs 429 but palm oil futures on Malaysia Derivatives Exchange closed up eight ringgits at 1,570 ringgits ($430) a tonne.

More Stories on : Oilseeds & Edible Oil | Excise and Customs

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Crisil launches agri risk monitor

Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line