Edible oil prices shot up by more than Rs 10 on revision of tariff value on imported RBD Palmolien by Government.
The Cabinet Committee on Economic Affairs has approved the proposal of Ministry of Consumer Affairs, Food & Public Distribution, to defreeze the tariff value on imported RBD palmolein from $484 a tonne and align it with the current international prices and scrapped the proposal to lower import duty rate on the refined oil.
Barring groundnut oil which rule steady, all other edible oils shot up in par with higher import parity due to revision of tariff values. Imported Palmolein rose by Rs 9, soya refined oil up by Rs 8, rapeseed oil increase by Rs 13, sunflower expeller refined and cotton refined oil improved by Rs 5 each in Mumbai market. Sentiment was dull for a short while but expectation of higher demand in coming festival days keep under current positive.
Market sources said the import duty on refined palm oils is currently calculated at a base price of $484 a tonne, far lower than the current import price of about $1,030 a tonne. As tariff value remained unchanged for about six years, though import duty on refined oil is 7.5 per cent, the effective rate is only about 3.6 per cent on current prices. Considering said revision of tariff value as a doubling the import duty cost domestic refineries have increase the price of palmolein by more than Rs 10. Soyabean and other edible oils shot up on bullish futures markets and on strong fundamentals.
Due to sudden spurt in price, activities remain subdued as no one was interested in fresh bulk buying. Merely 80-00 tonnes of palmolien was resale traded at Rs 619-620 during the day. There were no reports of direct volumes with refineries. All were waiting for official notification. Meanwhile, tracking India’s move Malaysian BMD CPO futures closed lower by 18, 15 and 3 ringgits a tonne.
Analyst said in India, tariff value for imported edible oils remained unchanged since long. In September, 2011, Indonesia the largest exporter of Crude Palm Oil (CPO) to India increased export duty on CPO from 15-16.5 per cent and reduced export duty on refined palmolein from 15 per cent to 8 per cent, which heavily affected the domestic refining industry. India imported 12 lakh tons of refined palm oil during November-June, up nearly 90 per cent from a year ago. The Government had sought a rise in the base import price of edible oils to encourage higher import of crude edible oils instead of refined oils to protect local refineries.
Last Liberty was quoting palmolein at Rs 632, Super palmolein Rs 682, soya oil Rs 776 and sunflower refined oil Rs 772. Ruchi quoted palmolein at Rs 628–632 for August. Soya refined oil Rs 763 for July and Rs 765–769 for August. Sunflower refined oil at Rs 763 for July and Rs 765-769 for August. Allana’s rate for Palmolein was Rs 626. Bunge’s rate was Rs.627. Vaibhavi quoted palmolein Rs 624 for 15 – 30 August. In Saurashtra - Rajkot groundnut oil was Rs.1850 (Rs 1,850) for Telia tin and Rs 1,210 (Rs 1,210) for loose – 10 kg.
On National Board of Trade – Indore, Soya refined oil August -12 futures was Rs 806 (Rs.809.20). Malaysia's crude palm oil August contracts settled lower at MYR 3,007 (MYR 3,025), September at MYR 3,025 (MRY 3,040) and October at MYR 3,042 (MYR 3,045) a tone.
The Bombay Commodity Exchange spot rates were (Rs/10 kg): groundnut oil 1,185 (1,185), soya refined oil 760 (752), sunflower exp. ref. 705 (700), sunflower ref. 760 (760), rapeseed ref. oil 885 (872), rapeseed expeller ref. 855 (842) cotton ref. oil 750 (745) and palmolein 624 (615).