Duty cut on edible oils likely

India is seriously considering a 15-20-percentage-point cut in import duty on edible oils to bring down domestic prices of these commodities, according to a report by Oil World, a

Germany-based global oil and oilseed research and forecasting body.

The report also said the government is contemplating other measures like controlling futures trading in these commodities to cool prices.

"The government is reportedly seriously considering to reduce import taxes on soya and palm oils by 15-20 percentage points and probably take other measures (namely, limit futures trading) to bring down domestic edible oil prices," the report said.

On Tuesday, NewsWire18 has quoted a government official saying "rising edible oil import prices are a cause of serious concern and the government is expected to announce steps to cool down prices ahead of Diwali festival on November 9."

The official had also hinted at other options like suspending futures trade in edible oils and banning export of groundnut and sesame seeds.

Government has already cut import duty on edible oils five times this year to check domestic prices and inflation.

The latest cut has brought down the levy on palm oils to 40 per cent from 50 per cent and on soyoil to 40 per cent from 45 per cent.

On crude sunflower oil, the levy was cut to 40 per cent from 50 per cent and on refined sunflower oil it was brought down to 50 per cent from 60 per cent.

However, industry experts said India is still insulated from spiralling global edible oil prices and domestic prices are still quoting at substantial discount to import parity price.

"Domestic refined oil prices are still quoting at Rs 505-508 per 10 kg, which are at nearly 8 per cent discount to duty paid landed cost of soyoil (at around Rs 545)," an edible oil analyst at Mumbai-based commodity brokerage said. Spot prices of refined soyoil are hovering at Rs 505-510 per 100 kg in India.

The near-month November contract on the National Commodity and Derivatives Exchange""India's premier farm-commodity exchange""was trading at Rs 509 per 10 kg, up Rs 3.65 rupees from Wednesday.

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REINING IN

Govt may reduce import taxes on soya and palm oils by 15-20 percentage points

Other options like suspending futures trade in edible oils and banning export of groundnut and sesame seeds could be considered

Government has already cut import duty on edible oils five times this year to check domestic prices and inflation