Palmoil, soyoil tariff cut peeves traders

The government today cut the import tariff value "" the base price at which import duty is levied "" on palmoils and crude soyoil.

According to market players this cut is out of sync as the international prices have risen since the last tariff change announced on January 16.

"Brazilian soyoil prices have risen 3.5 per cent and Argentinian just over 2 per cent. In the current scenario, tariff values are revised in tune with international price trends but this cut is confusing the market," said a Mumbai based analyst.

The tariff cut for crude palm oils and crude soyoil is minimal and in rupee terms this will make the commodities cheaper by 30-60 paise per 10 kg. Thus, the overall impact is minimal.

The previous revision had curbed the favourable tariff structure for refined palm oil by $19 rise in crude and RBD palmolein and that remains after the current cut also.

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 the government, for last two months now, has been making changes on a fortnightly basis.

Seemingly, duty revision is done on a fortnightly basis-on the 15th and the last day of the month-and this schedule was followed in October and November, and now in January.

December, however, saw traders wait for the downward tariff revision as international prices fell and tariff continued to tread higher.