Commodities

SEA feels consumers may not get much benefit of duty reduction on CPO

Our Bureau Mangaluru | Updated on June 30, 2021

This is due to increase in palm oil prices in Malasia and Indonesia

The Solvent Extractors’ Association (SEA) of India has said that the consumer may not be benefited with the reduction in import duty on crude palm oil (CPO) as there was an increase in palm oil prices in Malaysia and Indonesia.

In a press release on Wednesday, Atul Chaturvedi, President of SEA of India, said the reduction in the import duty on CPO is around $55/60 per tonne or around ₹4,600 to ₹5,000 per tonne. “However, this drop has been negated by rise in palm oil prices today in Malaysia / Indonesia by $40/45 per tonne. In other words, Government may end up losing revenue and consumer may not be benefitted,” he said.

SEA had been suggesting to the Government to moderate duties when edible oil prices were at peak during April to give some relief to the consumer. The Government delayed the announcement apparently to encourage the oilseed farmer to plant more oilseeds. However, it is interesting to note that international values of palm oil have fallen 15 per cent to 20 per cent already, and this decision looks a bit delayed, he said.

The introduction of ‘Sunset Clause’, which states that this reduction is only up to September, is a welcome sign as kharif oilseed marketing starts in October, and lower duty can bring down the local oilseed prices and discourage Indian farmers, Chaturvedi said.

The Government’s decision to reduce duty till September will also help kill rumour mongering and help stabilize trade, which was on tenterhooks during last few months, he added.

Published on June 30, 2021

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