New Delhi: India, the world’s largest buyer of vegetable oils after China, may impose tax on imports to protect oilseed growers as cheap palm oil floods the domestic market.
The government may levy the tax after Diwali on 28 October, agriculture minister Sharad Pawar said in New Delhi on Wednesday. Duty on crude soya bean and palm oils was scrapped in April and the levy on refined edible oils was cut to 7.5% to bolster supplies.
Lower vegetable oil purchases may pressure palm oil prices, which have fallen to a two-year low in Malaysia, which trades the global benchmark. The tropical oil makes up 90% of India’s total purchases of edible oils.
Edible oil imports in September gained 9% to 623,208 tonnes from 569,538 tonnes a year ago, the Solvent Extractors’ Association said last week. Imports climbed 14.5% to 4.82 million tonnes (mt) in the 11 months ended 30 September, the trade body said.
January-delivery palm oil dropped as much as 6.7% to 1,542 ringgit (Rs22,097) a tonne, the lowest since October 2006, on the Malaysia Derivatives Exchange. Prices have halved this year as demand lags behind supply.
The government may also lift the ban on export of cooking oils after Diwali, Pawar said. Sales abroad were halted for a year in March to bolster domestic supplies. A levy on exports of the aromatic basmati rice may be lifted, Pawar said, adding the government won’t scrap curbs on exports of other varieties of the grain.
India, the world’s second biggest rice producer, is forecast to harvest a record crop this year after rains spurred farmers to boost sowing. The monsoon crop, planted in June, may total 83.25mt, the government said last month. That’s 0.5mt more than a year earlier.
Thomas Abraham Kutty in Mumbai contributed to this story.