The Hindu Business Line : Tariff value hiked sharply for palm group of oils

The Union Government on Monday hiked the tariff value of palm group of oils sharply by $28-34 a tonne. The value for crude soyabean oil was also raised by $2 a tonne.

The sharpest hike was made in the case of crude palm oil, whose tariff value was raised by $34 a tonne. The value for RBD palmolein was increased by $28 a tonne.

After Customs duty cut

The tariff value increase comes immediately after the Centre cut the Customs duty by 10 percentage points for palm group of oils.

The tariff value is taken as the base value by the Customs authorities to calculate import duties for various edible oils. The value has been raised in tune with the rising edible oil prices in the global market. The value is fixed to ensure that there is no under-invoicing of the import consignments.

Palm group of oils have witnessed a rise of nearly $60 a tonne in the past one month.

The duty for crude palm is 70 per cent, while that for RBD palmolein is 80 per cent. For crude soyabean oil, the tariff value is 45 per cent. Besides, vegetable oil imports attract a 4 per cent countervailing duty and in addition, the refined edible oils attract 2 per cent cess.

Price hike

According to Kotak CSL Research, the revision will lead to crude palm oil rising by Rs 11.92 for 10 kg and Rs 11.22 for RBD palmolein. In the case of crude soyabean oil, the increase will be Rs 0.44 a kg for 10 kg.

The change in the soyabean oil has been minimal, but with the increase in the prices of crude palm oil and RBD palmolein, we expect the demand for soyabean oil to pick up from current levels," it said.

Landed cost

With the hike, the landed cost of crude palm oil will be $845.67 a tonne and $944.10 for RBD palmolein. For crude soya oil the cost will be $836.58. The costs are $30 a tonne lower than what it was after the last revision on August 1. This is mainly in view of the cut in Customs duty. However, in the case of crude soyabean oil, the landed costs will rise by $1.

In Kuala Lumpur, crude palm oil futures ended lower as soyabean oil and crude prices declined. Benchmark October closed at $448 a tonne. RBD palm oil for immediate delivery was flat at $480, while RBD palmolein was unchanged at $487.50.

In the Mumbai oil and oilseeds market, crude soyabean oil ruled flat at Rs 420 for 10 kg, while RBD palmolein was up Re 1 to Rs 452.

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