Edible oils get customs break

Price dip expected in 4 categories.

Consumer prices of edible oil, which shot up 12 per cent in a year, are likely to fall, with the government cutting import duty on four edible oil categories today.

Retail prices of palm and sunflower oils are likely to drop by Rs 2 per litre, following a reduction in import duty by 10 to 12.5 percentage points effective today.

"The landed cost of crude palm oil, currently $930-935 a tonne, will go down by about $50 and domestic edible oil prices will decline by Rs 2 per kg, provided the exporting countries do not raise prices," B V Mehta, executive director of the Solvent Extractors' Association of India, told Business Standard.

The move comes after the government abolished customs duty on cement and reduced duty on 10 other items, including steel, zinc and aluminium, to moderate prices. Manufactured group items like cement, edible oil and steel have contributed the most to the recent two-year-high inflation rate of 6.12 per cent.

The tariff values for the palm group of oils would also be frozen at July 2006 levels, a finance ministry release said.

As part of its strategy to keep prices of essential commodities under check, the government had earlier exempted customs duty on wheat and pulses and reduced customs duty on palm oils.

Mehta added that the cut in customs duty would benefit consumers, but farmers, about to harvest the rabi mustard crop, might get a lower price.

OIL SLICK

Crude palm oil, crude palmolein and other fractions of crude palm oil from
70% to 60%;

Refined Bleached Deodorized (RBD) palm oil, RBD palmolein and other refined palm oils from
80% to 67.5%;

Crude sunflower oil from
75% to 65%;

Refined sunflower oil from
85% to 75%