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M.R. Subramani

Chennai , Sept. 30

THE Centre on Friday raised the base import price on which it works out the customs duty for palm group of oils and crude soyabean oil by $2-5 per tonne.

But the increase, coming close on the heels of a cut in the base price also called tariff rate on September 16, had little impact on either the domestic or global markets with prices remaining unchanged. In terms of landed price without taking into account the freight charges, the hike will have minimum effect. (See table)

According to a notification issued by the Ministry of Finance, the tariff rate for palm oil has been increased by $5 to $402 per tonne and for RBD (refined bleached and deodorised) palm oil, it has been raised by $2 to $420. For other palm oils, the rate is up $3 to $411, and for crude palmolein, it is up $4 to $418. For RBD palmolein and other palmolein, it has been increased by $3 each to $430 and $424, respectively, while for crude soyabean oil the tariff has been raised by $2 to $508.

The tariff rate has been increased in line with the rise in global vegetable oil prices. On September 16, it was cut after a gap of six months in tune with the global prices.

"The increase in the tariff rate will have no impact on the prices or imports," said Mr B.V. Mehta, Executive Director, Solvent Extractors Association of India.

Though the decision of the Centre to increase the tariff rate has been sudden, the market had been abuzz with such a move since the morning, according to trading sources.

"The Centre should announce a criteria for revision of tariff rates for better transparency. It will clear rumours and confusion in the market. It has to come at a specific date as requested by the industry," Mr Mehta said.

In the global market, only the news that Europe's demand for vegetable oil for fuel needs is rising drove the prices. In Kuala Lumpur, crude palm oil closed higher at $387 per tonne, while RBD palm oil was up $2 at $410. RBD palmolein also gained at closed at $420, while crude soyabean oil was quoted at $465 in Rotterdam.

However, the domestic crude soyabean oil ruled flat at Rs 323 for 10 kg, while groundnut oil closed at Rs 520. Sunflower oil and palmolein also ended unchanged at Rs 400 and Rs 362, respectively.

According to market sources, the Centre could have raised the tariff as the cut earlier this month was seen as a move that would affect the oilseed growers when harvest of kharif crop was due. Kharif crops have begun arriving in the market and arrivals are set to gather pace in the next couple of weeks.

The cut on September 16 was seen having a bearish effect on oilseed prices and it was feared that it could affect rabi sowing also what with the National Agricultural Cooperative Marketing Federation have a 20-lakh-tonne mustard stock. "But this increase will not help the growers too," Mr Mehta said.

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