Palm, soy oils import tariff cut out of sync

The government today cut the import tariff value ""the base price at which the import duty is levied""on palmoils and crude soyoil. While the duty on oils was cut $1-4 a tonne.

Tariff value of crude palm oil remains out of sync with the prevailing international prices which is around $400-405 a tonne.

"Correction was required in CPO rate but it has not happened this time around. Rates for other oils are okay but unlike to impact the market," said Sandeep Bajoria, president of The Central Organisation of Oil Industry and Trade.

Given that imported oils are already in disparity "" being sold at a discount""imports will not become dearer, said an analyst. While the change in landed cost of crude soyoil is 62 paise er 10 kg, that of palm oils is Rs 0.37-1.65 per 10 kg.

On the impact of tariff cut, traders and analysts feel it is unlikely to have much impact on the current prices as change is marginal, traders and analysts said. Further, the revision in CPO was much lower than market expectation.

The government sets the tariff value on palm and crude soybean oils. Tariff value changes, basically was to be administered in tandem with a minimum 10 per cent change in international prices but now changes are made on a fortnightly basis.

Seemingly, duty revision is now coming in fortnightly ""on the 15th and the last day of the month""and this schedule has been followed for two months now, traders said. If the pattern is followed, this is likely to keep the market away from undue speculation.