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Ahead of the festival season, the Government has reduced the basic customs duty on crude and refined soyabean and sunflower oils by 7.5 percentage points in an attempt to keep edible oil prices on check.
In a notification issued late on Thursday, the Central Bureau of Indirect Taxes and Customs (CBIC) reduced the customs duty on crude soyabean and sunflower oils from 15 per cent to 7.5 per cent. Duty on refined soyabean and sunflower oils have been reduced to 37.5 per cent from 45 per cent. The new customs duties has come into force from Friday and will be in force till September 30, according to the notification.
While some industry experts termed the decision as “confusion within the Government”, representatives of the edible oil sector welcomed the decision.
BV Mehta, Executive Director, of Solvent Extractors’ Association of India (SEA), told BusinessLine that the government has to balance the interests of consumers as well as farmers.
Stating that prices of soyabean oil and sunflower oil had gone through the roof, he said the decision to reduce the basic customs duty will change market sentiments. “I am expecting sunflower and soyabean oil to go down by ₹3-4 a kg in the near future,” he said.
Sudhakar Desai, President of Indian Vegetable Oil Producers’ Association (IVPA), said the basic customs duty on soft oils have been reduced in customer’s interest as it was done in the case of palm oil a few weeks ago. Whatever arriving between now and September will attract lower duty. To that extent, consumers should benefit during the festival season, Desai said.
‘Stable policy needed’
It would have been better if it was implemented around 1-2 months ago as it takes almost two months for the soyabean oil to reach India from Argentina and Brazil. Vessels arriving now from these nations will stand to gain. The new shipments will face the same uncertainty as the duty relief is only till September 30. India should move towards more stable policy instead of knee-jerk reactions, Desai said.
The Centre was forced to cut import duty on edible oils after their prices soared in the global market.
According to SEA data, groundnut oil is currently ruling at ₹1.5 lakh a tonne (against ₹1.26 lakh the same period a year ago), rapeseed oil at ₹1.54 lakh (₹1.05 lakh), sunflower oil at ₹1.43 lakh (₹93,786), RBD palmolein at ₹1.28 lakh (₹84,405), crude palm oil ₹1.2 lakh (₹75,314) and degummed soyabean oil at ₹1.37 lakh (₹83,081).
The Consumer Affairs Ministry’s retail price data show that groundnut oil is currently ruling at ₹175.48 a kg (against ₹148.97 a year ago), mustard oil at ₹172.49 (₹124.62), soyabean oil at ₹155.56 (₹102.99), sunflower oil at ₹172.37 (₹114.36) and palm oil at ₹132.95 (91.72).
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