India cuts edible oil import duty to lower prices ahead of festivals - Reuters

India cuts edible oil import duty to lower prices ahead of festivals | Reuters

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India cuts edible oil import duty to lower prices ahead of festivals

By Rajendra Jadhav

September 23, 202612:53 PM EDTUpdated 7 hours ago

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!A labourer carries vegetable oil packets on a tricycle as a man stands in front of his shop selling food grains, at a wholesale market in Kolkata

A labourer carries vegetable oil packets on a tricycle as a man stands in front of his shop selling food grains, at a wholesale market in Kolkata, India, January 4, 2017. Picture taken January 4, 2017. REUTERS/Rupak De Chowdhuri/File Photo Purchase Licensing Rights, opens new tab

* Summary
* Companies

* Crude sunflower oil import duty falls to 5.5% from 16.5% after levies
* India meets nearly two-thirds of vegetable oil demand through imports
* Higher Indian demand would support Malaysian palm ​oil and US soyoil futures, traders say

MUMBAI, Sept 23 (Reuters) - India has cut ‌the basic import duty on crude and refined edible oils, including palm oil, soyoil and sunflower oil, the government said in a notification late on Wednesday, as it seeks to lower prices during the peak festive season.

​Vegetable oil prices in India have risen nearly 20% over the past year, and ​the duty cut is expected to lower prices and boost consumption during major ⁠religious festivals from September to November with sweets, snacks and fried foods.

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Internationally, increased Indian demand ​would support benchmark Malaysian palm oil and US soyoil futures , traders said.

The basic import duty ​on crude palm oil and crude soyoil has been reduced to 5% from 10%, while the duty on refined palm oil and refined soyoil has been cut to 27.5% from 32.5%, the notification said.

The import duty ​on crude sunflower oil has been cut to zero from 10%, while the duty on refined ​sunflower oil has been reduced to 22.5% from 32.5%, it said.

Apart from the basic customs duty, edible ‌oil ⁠imports into India also carry the Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.

Crude palm oil and crude soyoil will attract a total import duty of 11%, down from 16.5%, while crude sunflower oil will attract a 5.5% duty, down from 16.5%.

Reuters reported last week that ​India was planning to cut ​import duties on edible ⁠oils to provide relief to consumers during the festive season.

"Anticipating a reduction in import duty, refiners had held back on purchases, but they will ​now step up imports to meet festival-season demand," said Mumbai-based Sandeep Bajoria, ​chief executive ⁠of Sunvin Group, a vegetable oil brokerage.

India meets nearly two-thirds of its vegetable oil demand through imports, mainly palm oil, soyoil and sunflower oil from Malaysia, Indonesia, Argentina, Russia and Ukraine.

Sunflower oil ⁠will be ​the biggest beneficiary of the duty cut, making it ​more attractive for refiners and potentially taking some demand away from soyoil and palm oil, said Aashish Acharya, vice president ​at Patanjali Foods Ltd (PAFO.NS), opens new tab.

Reporting by Rajendra Jadhav and Nikunj Ohri; Editing by Kevin Liffey and Sanjeev Miglani

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