India unexpectedly cuts import duties on refined soybean, sunflower oils

The Centre, in a late night development, lowered the import duty on refined soybean oil and refined sunflower oil to check food inflation.

The import duty on refined soybean oil has been brought down 17.5 per cent to 12.5 per cent, while that on refined sunflower oil has been brought down in a similar proportion.

The move to lower duties is in total contrast with the mood prevailing in the market which was expecting a duty hike as both domestic and international edible oil prices have crashed in the last few months.

Traders said the decision to cut down duties against the expectations of an increase shows that Centre is hugely concerned with food inflation going into a big election year and also there are genuine worries over the fate of 2023 southwest monsoon in a El Nino year.

So far till June 14 the Southwest monsoon is 53 per cent less than normal.

However, some traders said the duty differential between crude and refined soybean and sunflower oil is still large enough to ensure that shipment don't come in a hurry.

The import duties on crude soybean oil, sunflower oil and palm oil are around 5.50 per cent.

"Basically Government wants to keep the price of edible oil under check. Even with lesser duty difference between crude and refined soya and sunflower oils , chances of shipment of refined soya or sunflower oil is not commercially viable but may have some temporary sentimental impact on market," a senior industry official said.

According to the latest data, the landed price of imported palm oil in India is around $805 per tonne which is around 46 per cent less than the same period last year.

That of imported soybean oil is around $ 970 per tonne which is around 43 per cent less than the same period last year year while that of imported sunflower oil is around $860 per tonne which almost 55 per cent cheaper than the same period last year.

India imported around 1.05 million tonnes of edible oils in April 2023 which is 15 per cent more than the same period of last year.

While in the November to April period of 2022-23 edible oil year that runs from November to October the country imported around 8.11 million tonnes of edible oils which was 21 per cent more than the same period laat last year.

In the 2021-22, edible oil year, India imported over 14 million tonnes of edible oils of which an overwhelming 56 per cent was palm oil largely from Malaysia and Indonesia.