Imports of crude palm oil are likely to increase as duties are reduced

Mumbai, Ta. 28 November 2020, Saturday

Industry expects India's palm oil imports to increase by as much as one lakh tonnes a month from December as the government reduces the import duty on crude palm oil. Local refiners are also expected to benefit from cheaper imports.

India is the largest importer of palm oil. In a decision taken on Thursday, the government has reduced the import duty on crude palm oil from 7.50 per cent to 7.50 per cent. The decision is part of a drive to curb rising food prices in the country.

According to sources in the Indian Vegetable Oil Producers' Association, the reduction in import duty will make palm oil more competitive with sunflower and soybean oil and importers will have to pay 2.50 per cent less tax on it.

Import duty on crude soybean oil and crude sunflower has been maintained at 5 per cent. India imports most of its palm oil from Malaysia and Indonesia.

Market circles are expecting that the reduction in palm oil duty will also be favorable for the country's refiners and increase in oil refining activity. India has huge potential for refining crude palm oil.

In the 2013-2014 marketing year ended October 31, India's palm oil imports fell 3 per cent to 9 lakh tonnes, the lowest level in nine years.