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RPT-UPDATE 1-India raises import tax on palm oil to highest in a decade
Published Mar 01, 2018 22:11
Updated Mar 01, 2018 22:20
© Reuters. RPT-UPDATE 1-India raises import tax on palm oil to highest in a decade
(Repeats with no changes to text)
* India raises crude palm oil import tax to 44 pct
* Refined palm oil import tax rises to 54 pct
* Refiners could prefer soyoil, sunflower over palm oil
By Rajendra Jadhav
MUMBAI, March 1 (Reuters) - India has raised import tax oncrude and refined palm oil to the highest level in more than adecade, the government said in a statement on Thursday, as theworld's biggest edible oil importer tried to support localfarmers.
The duty increase would lift oilseed prices and encouragedomestic supply for crushing, helping cap edible oil importsin the 2017/18 marketing year that started on Nov. 1, dealerssaid.
India raised import tax on crude palm oil to 44 percent from30 percent and lifted the tax on refined palm oil to 54 percentfrom 40 percent, a government order said.
India relies on imports for 70 percent of its edible oilconsumption, up from 44 percent in 2001/02.
The fourth increase in import tax in less than six monthswould push up domestic edible oil prices NSOc1 and supportprices of local oilseeds like soybean NSBc1 and rapeseed NRSc1 , said B.V. Mehta, executive director of the SolventExtractors' Association (SEA), a Mumbai-based trade body.
"Supplies from the new season rapeseed crop have juststarted. Now farmers will get remunerative prices due to theduty hike," Mehta said.
India primarily imports palm oil from Indonesia and Malaysiaand soyoil from Argentina and Brazil. It also buys small volumesof sunflower oil from Ukraine and canola oil from Canada.
The duty hike would narrow the difference between palm oiland soft oils like soyoil and sunflower oil, making it lucrativefor refiners to increase purchases of soyoil and sunflower oilin coming months, said a Mumbai-based dealer with a globaltrading firm.
"Palm oil's share is likely to fall substantially unlessIndia raises import tax on soyoil and sunflower oil," the dealersaid.
On Thursday, landed cost of crude soyoil at Mumbai port was$812 per tonne, compared to $695 for crude palm oil, accordingto data compiled by trade body SEA.
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