The edible oil market is agog with rumours that the Government is seriously considering withdrawing the 7.5 per cent customs duty currently levied on refined oils.
Such a move will have a salutary effect on domestic prices. Currently, refined palmolein is sold at $1,260 a tonne.
With zero-duty, overseas prices may spurt by about $30-40 a tonne. However, large importers and domestic players are more likely to start liquidating their stocks, which will improve availability and lower domestic prices.
Duty-free import of refined oils will facilitate traders, alongside refiners, to import and quickly distribute ready-to-consume cooking oil.
At present, the country's edible oil market is virtually controlled by a handful of large refiners. Duty-free import of refined edible oils is part of Government strategy to contain food inflation.