Duty on Soyoil, Sunflower Oil Reduced

_{Image Credit: Mint}

The Indian government has announced a reduction in import duty on refined soyoil and refined sunflower oil from 17.5% to 12.5%, effective from Thursday. This decision aims to control the prices of edible oil. As a result, all crude oils, including crude palm oil, sunflower oil, and soya oil, will now attract a 5% import duty, resulting in a total tax incidence of 5.5%. For refined edible oil, the effective import duty will be 13.75%, consisting of 12.5% import duty and a 10% cess on import duty.

The Solvent Extractors’ Association of India (SEA) believes that despite the reduced duty difference between crude and refined soya and sun oils, the shipment of refined soyoil or sunflower oil may not be commercially viable, but it could have some temporary sentimental impact on the market.

Recent data from SEA reveals that from November to April, imports of palm products significantly increased, while the share of soft oils decreased. However, in the last two months, there has been a rise in shipments of sunflower and soybean oils due to oversupply and lower international prices compared to soybean oil and crude palm oil.

India, being the largest buyer of vegetable oils globally, heavily relies on imports for approximately 60% of its annual consumption of 24 million tonnes. Of the total 14 million tonnes of edible oil imports, 75% is crude oil, and 25% is refined oil.

The government had previously reduced import duties on crude palm, soybean, and sunflower oils in September last year, and these concessional duties on edible oils were extended until March 31 of the following year.

The landed prices of crude palm oil (CPO), crude soyoil, and sunflower oil have seen a significant decrease compared to the prices of refined soyoil and sunflower oil, providing an advantage for imports of the former.

Re-reported from the story originally published in Mint