Rise in Indian vegoil import tax not expected to have major impact

You might also like

DRI busts smuggling rackets, seizes 31kg gold

03/02/2020

Longest smuggling tunnel, larger than 14 football fields, discovered on US-Mexico border

30/01/2020

MUMBAI: The increase in import duty on vegoil in the Indian budget presented last week would not have a major impact because it effectively means only a $10/mt rise in tariff for CPO imports, market sources said Friday.  The rise in import duty in November last year was much higher, around $100/mt, a Singapore-based source said.
India removed the 3% education cess that was levied on imported edible oils and effectively increased the import duties on various vegoils by around 3% in the latest budget.
Only the duty imposed on imported crude cottonseed oil was increased to 30% from 12.5% and on refined cottonseed oil to 35% from 20%.  The elimination of the education cess effectively increased the import duty on CPO to 33% from 30.9% and for palm olein to 44% from 41.2%.
Import tariffs on crude soybean oil duty was raised to 33% from 30.9%, and on canola oil to 27.5% from 25.8%.
A 10% welfare surcharge has also been imposed on all imported goods including vegoils. The increased import duties are effective immediately and allows Indian refiners and importers to raise domestic prices yet again, increasing profitability from existing CPO stocks.
Oscar Tjakra, an analyst with Rabobank, said Friday that the hike in import tariffs was expected to lead to an increase in CPO imports as the government encourages refining the oil within India.
The differential duties will only impact refining margins in India, Malaysia and Indonesia, he said, adding that it would not have a big effect on import volumes.