Edible oil prices expected to soften

New Delhi, October 13 (Agency)

The government on Wednesday removed basic customs duty on crude varieties of palm, soybean and sunflower oil and also cut duty on refined edible oils. This move will help in bringing down the prices of edible oils during the festive season. Edible oil industry body SEA said this could bring down the skyrocketing edible oil prices by up to Rs 15 per litre.

The Central Board of Indirect Taxes and Customs (CBIC) in two notifications said that the reduction in import duty and cess effective from October 14 will be applicable till March 31, 2022. Agricultural Infrastructure Development Cess (AIDC) on crude palm oil, crude soybean oil and crude sunflower oil has also been reduced. Its rate will now be 7.5 percent on crude palm oil, while it will be 5 percent for crude soybean oil and crude sunflower oil. Earlier the cess was 20 per cent, while the basic customs duty was 2.5 per cent. After this deduction, the effective customs duty on crude palm oil will be 8.25 per cent. The effective customs duty on crude soybean oil and crude sunflower oil will be 5.5 per cent. Earlier, the effective duty rate on these three crude oils was 24.75 per cent. Besides, the basic customs duty on refined varieties of sunflower, soybean, palmolein and palm oil has been reduced to 17.5 per cent from the existing 32.5 per cent. The refined versions of these oils do not attract AIDC.

It may be noted that the prices of edible oil in the domestic retail markets have risen by up to 46.15 per cent in the last one year due to global factors and local supply crunch.

‘Decision time is not right’

BV Mehta, executive director, Solvent Extractors Association of India, said, “The government has reduced the import duty on edible oils due to increase in retail prices in the domestic market and festive season.” However, he has said that this is not the right time for this decision, as it may affect the income of the farmers. Mehta said, “The harvesting of soybean and groundnut has started. The decision to reduce import duty may bring down market prices and farmers may get lower prices. On the impact of this decision on retail prices, Mehta said, “Retail prices of refined palm oil may come down by Rs 8-9 per liter while that of refined sunflower and soybean oil by Rs 12-15 per litre. There may be a shortage.’

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