)
To protect the interests of farmers and provide a level-playing field to domestic oilseed processors, the government has raised the import duty on crude edible oil from 2.5 per cent to 7.5 per cent and that on refined edible oils from 10 per cent to 15 per cent.
"Yes, the government had raised the import duties on edible oils because international prices had climbed up in the last few weeks," a senior finance ministry official, who did not wish to be named, told Business Standard.
The increase means the duty differential between crude and refined edible oils has been kept at 7.5 percentage points, as suggested by the agriculture ministry.
The food ministry had favoured increasing the import duties to five per cent in case of crude oils and 15 per cent in case of refined, thus maintaining a duty differential between the two oils at 10 percentage points.
Welcoming the government's decision, Solvent Extractors' Association Executive Director B V Mehta said: "It would have been better for the domestic processors if the duty difference between the crude and refined edible oils was kept at 10-12 per cent as it would have resulted in capacity utilisation and value addition by the domestic refiners."
Mehta forecast the prices to increase marginally following this duty hike.
Echoing similar views, S P Kamrah, secretary-general of Indian Vanaspati Producers' Association, said: "Something has been done but there was a need to do more. The government should consider keeping the duty difference between crude and edible cooking oil at 10 per cent."
The import duties were last increased in January 2014.
The farm ministry had also suggested that edible oil import duties should be suitably aligned with international rates, so that they move up or down automatically irrespective of a formal proposal.
India imported an estimated 11.6 million tonnes of edible oil in the 2013-14 oil marketing year, which ended in October 2014, compared with 10.4 million tonnes in 2012-13. The country is expected to import 13 million tonnes edible oils in the 2014-15 marketing year, due to a drop in domestic oilseed production.
About 60 per cent of India's annual edible oil demand of 18-19 million tonnes is met through import, mostly from Malaysia and Indonesia.
The domestic oilseed crushing sector, too, has long been demanding that duties should be raised to protect the interest of crushers and also local farmers to sustain their interest in oilseed cultivation.
Palm oil futures in Malaysia rose to its highest in a month on Wednesday as heavy rains threatened harvest of palm fruits. The prices prior to that has also been on a higher side due to scrapping of an export tax by both Malaysia and Indonesia.
According to the government's official estimates, oilseed production in the current kharif season is estimated to be around 19.66 million tonnes, around 12.24 per cent less than last year due to uneven rains during the 2014 season.
