The Hindu Business Line : Rumours of cut in Customs duty

The market had been looking forward to a cut in the Budget proposal but the Union Finance Minister, Mr P. Chidambaram, left it untouched. Last week, Mr Dinesh Shahra, Managing Director, Ruchi Soya, told newspersons in Mumbai that the Centre was likely to cut Customs duty on edible oil imports.

Rumours doing rounds on edible oils also included a possible bar on futures trading by the Centre as in the case of pulses and grains.

Industry sources said any cut in Customs duty would have negligible effect in view of volatility in the global market. “The benefit is unlikely to accrue to the consumer. On Monday, crude palm oil slipped by nearly $60 a tonne at the start. In such circumstances, where prices are on a roller-coaster ride, any duty cut will be nullified,” the sources said.

The sources said the edible oil market had never witnessed such volatility in the last few years, adding that the Centre would have to accept the current price band.

“Can the Government do anything about $110 for a barrel of crude? It applies in the case of edible oils too,” they said.

Prices of almost all edible oils have declined by over 10 per cent since the beginning of this month, though they are nearly 50 per cent higher than rates that prevailed the same time a year ago.

— MRS

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