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Economic Times
3 days ago
- Business
- Economic Times
Import duty cut on crude edible oils will protect local processors: Industry bodies
Edible oil industry bodies SEA and IVPA have hailed the government's decision to cut basic custom duty on crude oils to 10 per cent, saying the move will discourage imports of finished products and safeguard the interests of domestic refiners. ADVERTISEMENT On Friday, the government reduced the basic custom duty on crude palm oil, crude soyabean oil and crude sunflower oil to 10 per cent from earlier 20 per cent. The effective import duty (including basic custom duty and other charges) on these three products will now be 16.5 per cent, as against 27.5 per cent earlier. With a sharp rise in imports of refined palmolien in the past six months, both industry bodies have been urging the government to increase the duty difference between crude edible oils and refined edible oils. Welcoming the decision, Solvent Extractors Association of India (SEA) President Sanjeev Asthana said, "the government's decision to increase the duty differential from 8.25 per cent to 19.25 per cent is a bold and timely move. It will discourage imports of refined palmolien and shift demand back to crude palm oil, thereby revitalizing the domestic refining sector." This move will not impact the overall volume of edible oil imports and is unlikely to cause any upward pressure on edible oil prices, he said. ADVERTISEMENT "On the contrary, the reduction in duty on crude oil will help reduce domestic prices, benefiting consumers," Asthana said. India imports more than 50 per cent of its domestic edible oil requirement. ADVERTISEMENT India imported 159.6 lakh tonnes of edible oils during the 2023-24 oil marketing year (November to October) valuing Rs 1.32 lakh crore. The basic custom duty on refined oils remains unchanged at 32.5 per cent. ADVERTISEMENT At present, the effective duty on refined oils is 35.75 per cent. The Indian Vegetable Oil Producers' Association (IVPA) President Sudhakar Desai said, "We thank the government for accepting the IVPA recommendation to increase the duty differential between crude and refined edible oil to 19.25 per cent." ADVERTISEMENT It is a significantly bold move towards ensuring Make in India and also protecting the sector from influx of refined oils causing capacity injury to the vegetable oil sector, Desai said. "This is a win-win situation for vegetable oil refiners and consumers, as local prices will go down due to lower duty on crude oils," SEA Executive Director B V Mehta said. India imports palm oil from Malaysia and Indonesia. Soyabean oil comes from Brazil and Argentina. SEA pointed out that the previous import duty difference of 8.25 per cent between CPO (crude palm oil) and refined palmolien had inadvertently incentivized imports of the finished product over the crude form. As a result, during the oil year 2023- 24 (November-October), refined palmolien accounted for over 20 per cent of total palm oil imports, and in the first half of oil year 2024-25 (November 2024-April 2025), its share rose to nearly 27 per cent. On May 29, the C&F price of RBD palmolien was USD 45 per tonne lower than CPO, further encouraging refined imports at the cost of domestic value addition, the SEA added.
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Business Standard
14-05-2025
- Business
- Business Standard
India's edible oil stocks fall to five-year low on weak palm oil imports
India's edible oil stocks in ports and pipelines dipped to a five-year low of 1.35 million tonnes (mt) as on May 1, 2025, due to a sharp drop in April palm oil imports that fell to their lowest in four years, data from the Solvent Extractors Association of India (SEA) showed. The last time India had lower than May 1, 2025 stocks in ports and pipelines was back on 1 May 2020, when it had stocks of around 0.91 mt. Depleted stocks may mean India will increase imports of palm oil and soyoil in the coming months, supporting Malaysian palm oil prices and US soyoil futures, news agency Reuters said. India's palm oil imports in April fell by 24.29 per cent from March to 321,446 tonnes, the SEA said. 'Low stocks do not mean that edible oil supplies are inadequate in the country. Stocks and imports have also dropped as mustard seed crushing is going on in full swing in the country, which is why domestic supplies are good,' said BV Mehta, executive director of SEA. The low stocks and low imports have come at a time when edible oil inflation in April 2025 as measured by the Consumer Price Index (CPI) had soared to 17.4 per cent, marking the sixth successive month of double-digit inflation — a pace not seen since March 2022, when the Russia-Ukraine conflict had just begun. 'The high edible oil prices are due to the fact that the landed price of crude palm oil in Mumbai ports, which is the benchmark, is still at around $1,100 per tonne, though it has softened since March,' Mehta said. Last year, during the same time, the landed price of crude palm oil was less than $1,000 per tonne. He said another reason for the high retail price of edible oils is that oil meals demand from the livestock industry has gone down, which is why millers are not able to bring down the retail price of edible oil. 'When a miller crushes oilseeds, he gets his revenues from selling edible oils and oil meals (to the livestock sector). Now when demand for one (oil meals) has gone down sharply, the pressure is on the other to compensate for the falling margins,' a trader said. Oil meals demand from the livestock industry has come down due to high supply of DDGS (Distiller's Dried Grains with Solubles), which is a by-product of ethanol production. With India producing over 5 billion litres of ethanol, the production of DDGS has gone up manifold. 'Rapeseed meal and rice bran meal are used for cattle feed while soymeal is used by the poultry sector. Demand for all of them has gone down due to DDGS,' Mehta said.
Reuters
25-04-2025
- Business
- Reuters
India's vegetable oil industry urges tariff reform to boost domestic refining
NEW DELHI, April 25 (Reuters) - India's vegetable oil industry has urged the government to widen the import tariff differential between crude and refined varieties to discourage imports of processed oils and support domestic refining capacity. The vegetable oil industry has invested heavily in port-based refineries to process imported crude oils locally, creating jobs, but rising imports of refined varieties have hurt India's interests, said the Solvent Extractors Association of India (SEA). Suppliers from Indonesia and Malaysia have been exporting more refined oils than crude, leading to lower capacity utilisation at Indian refineries, the SEA said in a letter to food minister Pralhad Joshi. The current import tariff gap between crude palm oil and refined palm oil is too narrow to curb rising imports of processed grades, the SEA said. The government should either increase tariffs on refined varieties or reduce tariffs on crude palm oil, the SEA said. A government spokesperson did not immediately respond to a request for comment. In September 2024, India imposed a 20% basic customs duty on crude and refined vegetable oils. Following the move, crude vegetable oils attract a 27.5% tax, while refined grades now have a 35.75% import duty. India meets nearly two-thirds of its vegetable oil demand through imports. It buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Business Standard
21-04-2025
- Business
- Business Standard
India's oilmeal export up 3% on year in March
The Solvent Extractors Association of India (SEA) has come out with the export data for export of oilmeals for the month of March, 2025 provisionally reported at 409,148 tons compared to 395,382 tons in March, 2024 i.e. up by 3%. The overall export of oilmeals during Apr.24 to Mar.25 in term of quantity reported at 4,342,498 tons compared to 4,885,437 tons during the same period of last year i.e. down by 11%, mainly due to reduction in export of rapeseed meal & castorseed meal and in term of Free on board (FOB) Value decreased to Rs.12171.0 crores from Rs. 15368.0 crores, down by 21%. Powered by Capital Market - Live News
