Import Duty Cut On Palm Oil Leaves Local Players Fuming

Trade bodies fear increased refined oil imports on reduced duty differential

After a sharp spurt in edible oil prices in the past two months, the Centre has relaxed the import duty on crude and refined palm oils. The move, however, has left the domestic industry fuming amid fears of a rise in refined oil imports under the new duty structure.

The government cut the import duty on crude palm oil from 40 per cent to 37.5 per cent and that on refined palm oil from 50 per cent to 45 per cent from January 1. This leaves the duty difference between the imported crude and refined oils at 7.5 per cent, as against 10 per cent earlier.

This, according to the domestic refining industry, will make import of refined palm oil more attractive and hurt the capacity utilisation of the refiners.

The duty-cut has been made under the ASEAN agreement and the India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA). Notably, India imports about 70 per cent of its annual edible oil requirements of about 24 million tonnes.