MUMBAI/NEW DELHI, Oct. 18 (Reuters) – India, the world’s largest importer of vegetable oils, is reportedly considering raising import tariffs on palm oil as part of its attempts to assist millions of its farmers who are suffering from falling oilseed prices.
India removed the basic import duty on crude palm oil (CPO) earlier this year to control pricing. A 5% levy on CPO imports known as the Agriculture Infrastructure and Development Cess is still in place in New Delhi.
Refined, bleached, and deodorized (RBD) palm oil is also subject to a 12.5% import duty in India.
A government source who asked to remain unnamed under established protocol stated, “We are looking at a proposal to reinstate the charge on crude palm and boost the RBD duty.”
“We will keep both farmers’ and consumers’ interests in mind.”
According to the second government source, the sector has also petitioned the government to hike the import tax to assist support in dropping oilseed prices.
According to B.V., prices for soybeans and groundnuts have fallen significantly in recent months due to increased supply. Mehta, the Solvent Extractors’ Association’s executive director.
Mehta remarked about state-mandated support prices, “In certain regions, the new crops are being sold even below MSPs.”
Gujarat, the home state of Prime Minister Narendra Modi, is the top groundnut and peanut producer in the world. Gujarat’s Bhartiya Janata Party is attempting to hold onto power.
To counteract the decline in oilseed prices, the government should increase the import tariffs on CPO and RBD by at least 10%. Mehta also suggested that the duty difference between CPO and RBD be increased to at least 12–13% to promote local refining.
India imports vegetable oil from countries like Russia, Ukraine, Brazil, Malaysia, and Indonesia to cover more than 70% of its needs. In terms of imported vegetable oils, palm oil makes up close to two-thirds of the total.
On Monday, Modi spoke to a group of farmers, sharing his concerns about India’s soaring import costs for vegetable oil and urging them to increase their oilseed production.