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India has hiked the import tax on palm oil and other edible oils by 20%, a move seen as helping local oilseed farmers.
The tax increase is effective from Saturday, according to a government notification on Friday.
The basic customs duty on crude palm oil (CPO), soybean oil and sunflower oil has been increased from zero to 20%, and from 12.5% to 32.5% for refined products.
Together with India's agriculture infrastructure and development cess and social welfare surcharge, the effective rate of import duty on crude oils will go up from 5.5% to 27.5%, and from 13.75% to 35.75% for refined oils.
An Indian trade group had sought an import duty hike on edible oils to support "remunerative prices" for local oilseed farmers.
Facing pressure from farmers in the soybean-producing states of Maharashtra, Karnataka and Madhya Pradesh, the federal government earlier approved soybean procurement at the state-fixed minimum support price of 4,892 rupees (US$58.30 or RM250.88) per quintal (100kg). Wholesale prices of soybean had fallen between 3,200 and 3,700 rupees in August, according to reports.
India is the world's top importer and second largest consumer of edible oils.
In its fiscal year of 2022-23 (April-March), India imported 16.5 million tons of edible oils, with domestic production providing only 40% to 45% of the country's total requirements. Its consumption of oils and fats was about 27.2 million tons in 2023, and the share of palm oil in it was 36%.
India imported 2.83 million tons of palm oil from Malaysia in 2023, accounting for 18% of total Malaysian palm oil exports. Its other palm oil suppliers are Indonesia and Thailand.
India imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
India's palm oil imports from Malaysia in August totaled 321,952 tons, including 305,122 tons of CPO and 14,800 tons of refined, bleached and deodorized (RBD) palm olein, according to industry data.
Palm oil's share in the country's total vegetable oil imports of 1.53 million tons last month was 52%.
Source: theedgemalaysia.com