Chennai, March 15
THE Union Government has raised the tariff value of imported crude soyabean oil to $535 (Rs 23,300) a tonne from $485 (Rs 21,100) with immediate effect. The move is in line with the current trend in the global market, where soya products' prices have been rising on fears of a lower crop in Brazil.
The hike also follows protests from various quarters, especially the edible oil trade, against a cut in the value announced on March 1. They had said that it would affect the edible oil industry and the farmers also.
The hike in the tariff value, the base price on which the customs authorities compute the import duty, is likely to result in increase in domestic prices of edible oils. It could also fetch better prices for oilseeds and thereby encourage the farmers to grow oilseeds next year also.
However, consumers may have to pay a little more for edible oil.
The hike in the tariff value means that now the customs duty for every tonne of crude soyabean oil will work out to $240.75 against $218.25 earlier. This will result in the landed cost of crude soyabean oil going up by a minimum Rs 980 a tonne. The customs duty for crude soyabean oil is 45 per cent, the maximum rate permissible under the country's obligations to the World Trade Organisation.
In the domestic market, refined soyabean oil prices increased to Rs 378 for 10 kg from Rs 378 on Monday. In the futures market, March futures refined soyabean oil increased to Rs 385 from Rs 384, while May futures were up at Rs 395 against Rs 390.
The tariff value hike also had its impact on the palm oil market. RBD palmolein in the domestic market was up Re 1 to Rs 374 for 10 kg, while in Malaysia crude palm oil futures for May closed 40 ringgits (Rs 458) up at 1,476 ringgits (Rs 16,900) a tonne.
"The increase will help farmers get good prices especially for rapeseed/mustard," trade sources said.
An analyst wondered why there was a steep cut of $80 a tonne in the tariff rate in the first place. "The Government should have exercised discretion in the first place and changing the tariff so frequently is not good," he said.
The Union Government has kept the tariff value, introduced mainly to check under-invoicing, of palm group of oils unchanged. The tariff value for crude palm oil, as fixed on February 15, is $400 a tonne, while for RBD palm oil it is $415. Other palm oils tariff rate is $410, crude palmolein rate is $412, for RBD palmolein it is $425, and other palmolein will attract a rate of $420.