Indian government increases import duties on vegoils, palm oil


The Indian government has again increased the import duties on various vegetable oils and soybeans on November 17, after a first round of duty increase in August, through notifications released on the website of the Central Board of Excise and Customs late Friday.

The import tariff on soybeans had been increased to 45% from 30%, although in its earlier round of hikes, the government had only increased import duties on different vegetable oils.

Palm oil was affected again, in this second round of duty hikes, with import duty raised to 30% from 15% on crude palm oil or CPO and to 40% from 25% on refined palm oil.

At the current palm oil price stipulated by the Indian government, the absolute value of the import duty on CPO, after the increase is $225.26/mt and and $316/mt for refined palm oil, a market source said.

Sunflower oil, which had escaped attention during the first round of import hikes, has also seen import duty rise to 25% from 12.5% for crude sunflower oil and to 35% from 20% for refined sunflower oil.

Also affected were rapeseed oil, including canola, mustard oil and colza oil. The crude fractions of these oils saw import duty hikes to 25% from 12.5%, while duties on refined oils were raised to 35% from 20%.

Soybean oil import duties were also raised to 30% from 17.5% for crude soybean oil and to 35% from 20% for refined soybean oil.

As domestic prices of Indian oil seeds skyrocket, the Indian government has introduced these measures to support its domestic oil seed farmers, and shield them from cheaper international imports.

Indian market sources had been saying that the first round of import duty hikes had not been sufficient to support domestic Indian farmers and because of upcoming elections as well as intense lobbying from the Indian vegoil refiners, another round of duty increases was expected.

Dorab Mistry of Godrej International, while speaking at the Indonesian Price Outlook Conference or IPOC in Bali Indonesia in early November said that productivity of Indian oil seeds is very low, leading to high prices.

Because of higher Indian incomes and rising consumption, Mistry also felt that the average Indian consumer may still be able to withstand higher vegoil prices, which will be a result of increased duties on imported vegoils.


Readers choice: TOP-5 articles of the month by UkrAgroConsult