India may raise import duties on palm, soyabean oils

The Agriculture Ministry has reportedly suggested a hike in the import duty of edible oils to protect domestic farmers so that they receive at least the minimum support prices for the oilseed crop. It is hopeful of a favourable decision soon.

Currently, the import duty (including cess) on crude palm oil, soyabean oil and sunflower oil is 5.5 per cent and on refined edible oils 13.75 per cent. Industry officials said there is zero duty on import of crude edible oil, which is very rare in any country and unless it is raised, farmers will not be motivated to grow oilseeds. The government is likely to soon announce the ₹6,800-crore national oilseeds mission.

The Food Ministry is not averse to a hike as it also wants farmers be encouraged to grow more oilseeds, particularly in view of the upcoming rabi sowing season, when India’s largest oilseed crop mustard will be sown, sources said. However, a final call on duty will be taken by the committee of ministers, headed by Cooperation Minister Amit Shah, the sources said.

Budget disappointment

The Agriculture Ministry, without suggesting exactly how much increase in import duty should be made, has opined that the final import price of edible oil should not be less than costs of edible oils processed from any of the domestically grown oilseeds, the sources said. As the groundnut and soyabean crops will start arriving from next month, a decision is likely to be taken soon, the sources said.

Ajay Jhunjhunwala, President of Mumbai-based Solvent Extractors’ Association of India, last month said in a statement that the industry was disappointed because of no announcement in the Budget regarding raising import duties on edible oils, as well bringing back the duty difference between crude oils and refined oils to minimum 15 per cent. “We had been requesting the government to increase import duties on edible oils to help incentivise oilseed farmers but it seems it has missed the attention,” he said.

Lower than MSP

On the other hand, the freshly harvested soyabean, which has started arriving in small quantities, is selling at an average ₹4,150/quintal in Madhya Pradesh and at ₹4,185/quintal in Maharashtra against the MSP of ₹4,892/quintal. Even the new crop of groundnut is also selling lower than its MSP of ₹6,783/quintal, farmers said.

According to Consumer Affairs Ministry data, the all India average retail price of soya oil was ₹123/litre during August (1-25), that of mustard oil was ₹145/litre, palm oil was ₹102/litre, groundnut oil ₹187/litre and sunflower oil ₹131/litre. During the year-ago period the rates were ₹133/litre for soya oil, ₹151/litre for mustard oil, ₹108/litre for palm oil, ₹192/litre for groundnut oil and₹147/litre for sunflower oil.