Govt cuts import duty on refined soybean, sunflower oils to 12.5%

The government has reduced the import duty on refined soybean and sunflower oils to 12.5 per cent from 17.5 per cent with effect from Thursday to boost the domestic availability and check prices, a finance ministry notification said.

Usually, India imports 'crude' soybean and sunflower oils and not their 'refined' form. Yet, the government has reduced the duty on refined soybean and sunflower oils.

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With this reduction, the effective duty on refined edible oils stands at 13.7 per cent, including cess on social welfare. The effective duty on all major crude edible oils is 5.5 per cent.

Commenting on this, Solvent Extractors' Association of India (SEA) Executive Director BV Mehta said the move may have some temporary impact on market sentiments but unlikely to attract imports.

"Basically, government wants to keep the prices of edible oils under check. Even with less duty difference between crude and refined soya and sunflower oils, chances of shipment of refined soya and sunflower oil may not be commercially viable but have some temporary sentiment impact on market," Mehta said in a statement.

Currently, there are no import of refined soybean and sunflower oils. According to SEA, the delayed onset of monsoon in Kerala by a week led to delay in sowing.

"The Met Department has forecast near normal monsoon, however El Nino is not ruled out completely and may spoil the chances of normal monsoon, which may impact kharif crop and domestic availability of vegetable oils in next oil year 2023-24," Mehta added.

India relies on imports to fulfill its demand-supply gap in edible oils. It meets nearly 60 per cent of edible oil demand through imports.