Edible oil import duty hike to improve domestic prices: Report

The government decision to hike import duty on edible oils by 12.5 per cent and 15 per cent is likely to safeguard farmers interests and protect country from cheap edible oil imports, and better prices for farmers, a report said.
The government has increased import duty on most of the edible oils imports to protect farmers and domestic industry's interest, Care Ratings said today.
Over the weekend, government hiked import duty on crude soyabean oil by 12.5 per cent to 30 per cent, soyabean refined oil by 15 per cent to 35 per cent, crude palm oil by 15 per cent to 30 per cent, RBD palm oil by 15 per cent to 40 per cent, sunflower crude oil by 12.5 per cent to 25 per cent and sunflower refined oil by 15 per cent to 35 per cent.

Care ratings said that the hike in import duty is likely to support the oilseed prices the farmers receive.
The move is expected to keep a check in cheap imports of edible oils. However, this measure will not reduce dependency on edible oil imports as the country meets about 65 to 70 per cent of the requirements through imports.
Care Ratings also said that increase in import duty is expected to result in higher domestic edible oil prices.

The government had last increased import duty by 5 per cent and 10 per cent in August 2017. The import duty has been hiked back-to-back to safeguard the interests of farmers. Rising imports have been leading to lower Minimum Support Price (MSP) for farmers.

According to data released by the Solvent Extractors' Association (SEA) soybean, rapeseed and groundnut were being sold lower than the MSP and their prices had declined in the range of 20 to 30 per cent on a year-on-year basis. The lower price, in turn deters farmers to sow oilseeds and opt for other crops.
As per the SEA, imports of edible oils increased by 3.5 per cent to 15.1 million tonnes in the oil year November2016-October 2017 compared to the corresponding period a year ago.