Centre stalls proposal to cut import duty on edible oils

NEW DELHI/MUMBAI: The government has put on hold a proposal to reduce import duties on edible oils as cooking oil prices started to fall in the world market after hitting record highs, two government and one industry officials said. The world’s biggest vegetable oil importer was considering reducing duties after domestic soy and palm oil prices more than doubled in the past year. “We are not cutting import duties now, a more longer term solution has to be found,” said an official.

NEW DELHI/MUMBAI: The government has put on hold a proposal to reduce import duties on edible oils as cooking oil prices started to fall in the world market after hitting record highs, two government and one industry officials told Reuters.

The world’s biggest vegetable oil importer was considering reducing duties after domestic soyoil and palm oil prices more than doubled in the past year, hitting consumers already stung by record fuel prices and reduced incomes amid the Covid-19 pandemic.

“We are not cutting import duties now, a more longer term solution has to be found. Cutting duties is not a sustainable solution,” said a government official with knowledge of the matter who asked not to be identified.

A second official, who also requested anonymity, said the decision to leave the import duty structure unchanged was taken as prices were now cooling in the overseas market, pulling the domestic prices lower too.

“The idea is to keep a close watch on international prices and global supplies, and if the situation warrants it, we’ll revive the proposal for a reduction in the duty to protect the interests of both consumers and farmers,” this official said.

Yet even after the recent correction of more than 20%, Indian edible oil prices are still around double their levels a year ago.

Demand from bulk buyers had already dropped after authorities imposed local lockdowns in response to the a devastating second wave of coronavirus infections over recent months, dealers said.

While India deliberated lowering import duties on vegetable oil, benchmark palm oil prices in Malaysia fell nearly a quarter in the last one month, giving some respite to importing countries.