Traders Urge Indian Government Not to Reduce Import Duty on Edible Oil Imports

New Delhi (Sputnik): Over the last two months, the prices of Indian edible oil have increased due to expensive imports from the international market. Major producers Malaysia and Indonesia have seen a decline, with crude palm oil being used for biodiesel. Palm oil prices have shot up by almost 35 percent in the last two months.

The Solvent Extractors’ Association of India has urged the Indian government not to cut the import duty on palm oil.

The association has said that with the rising prices of palm oil globally, imports will lead to higher revenues for the government, which can be used for investments in the domestic oil seeds market.

Global palm oil prices are up due to supply shortages in the Malaysian and Indonesian markets. 

“The government should refrain from reducing the import duty. Higher world prices would result in custom duty collection going up significantly. All the extra money generated should be diverted to oilseed development fund”, the Solvent Extractors’ Association said.

Explaining the calculations, Atul Chaturvedi, president of the Solvent Extractors Association of India, said, “Government revenue is currently about $4.2 billion and with 25 percent price increase, the import duty collection should be about $5.6 billion. If the additional resource is pumped in the oilseed sector, it will be a huge benefit".

The Indian edible oil prices have seen a sharp uptick in recent times. The pack is led by crude palm oil prices, which are up 47 percent this year. This is followed by soybeans, with nearly 30 percent gains, and refined soy oil is not too far behind, with nearly 25 percent gains.