Import duty on refined soybean, sunflower oils reduced to 12.5 pc

The Government has reduced the import duty on refined soybean and sunflower oils to 12.5 per cent from 17.5 per cent at a time when farmers have been demanding that the government should procure sunflower seeds on MSP. The finance ministry said in a notification that the reduction in import duty has been done to boost domestic availability and check prices.

The Centre's consumer-friendly decision, however, may not go down well with farmers who had recently blocked the Delhi-Chandigarh national highway near Pipli in Haryana for two days, but ended their protest after the state government assured them of appropriate price for sunflower crop.  With this import duty reduction, the effective duty on refined edible oils stands at 13.7 per cent, including cess on social welfare. The effective duty on all major crude edible oils is 5.5 per cent.

India imports 'crude' soybean and sunflower oils and not their 'refined' form. Yet, the government has reduced the duty on refined soybean and sunflower oils. But currently, there are no import of refined soybean and sunflower oils. India relies on imports to fulfill its demand-supply gap in edible oils. It meets nearly 60 per cent of edible oil demand through imports.

Bhartiya Kisan Union (BKU) leader Rakesh Tikait said the farmers were protesting so that their crops are purchased at MSP. "We shall keep fighting for MSP across the country," he said. The farmers are demanding that the Haryana government procure sunflower seeds at an MSP of Rs 6,400 per quintal. Tikait said the issue of MSP for sunflower crop was not only affecting farmers in Haryana but the entire farmer community. "We are demanding an MSP law for all crops, as promised by the Union government when we withdrew the farmers' agitation against the now repealed farm laws," he asserted.

Meanwhile, the Solvent Extractors' Association of India (SEA) Executive Director BV Mehta said the move may have some temporary impact on market sentiments but unlikely to attract imports. "Basically, government wants to keep the prices of edible oils under check. Even with less duty difference between crude and refined soya and sunflower oils, chances of shipment of refined soya and sunflower oil may not be commercially viable but have some temporary sentiment impact on market," Mehta said in a statement.

According to SEA, the delayed onset of monsoon in Kerala by a week has led to delay in sowing. "The Met Department has forecast near normal monsoon; however, El Nino is not ruled out completely and may spoil the chances of normal monsoon, which may impact kharif crop and domestic availability of vegetable oils in next oil year 2023-24," Mehta added.

Data from the SEA reveals that imports of palm products surged from November to April, reaching 4.9 million tonnes compared to 3.2 million tonnes in the same period last year. The share of palm oil rose from 49% to 61% during this period, while soft oils imports decreased. However, in the last two months, shipments of sunflower and soybean oils recorded significant growth, reaching 3.1 million tonnes in the first half of the current oil year.