India not seen lowering edible oil import tariff
India not seen lowering edible oil import tariff
NEW DELHI (Reuters): Indonesian and Malaysian industry
ministers will lobby India for lower duty on palm oil during
their visit starting Monday but the world's largest oil importer
is unlikely to oblige, industry officials said.
Indonesia's Trade and Industry Minister Luhut Pandjaitan and
Malaysian Primary Industries Minister Lim Keng Yaik would hold
meetings with India's finance, commerce and food ministries to
seek duty at par with soyoil.
Malaysia and Indonesia, the world's number one and two palm
oil producers respectively and traditional rivals, agreed in
February to form a world palm oil association to help lift palm
oil prices from 10-year lows.
"We do not expect any cut in duties because the prices are too
low, and any fall in import duty will hit farmers and the
domestic oil industry," a leading trader said.
In its federal budget in February, India imposed a steep
import duty of 75 percent on crude palm oil (CPO) and 85 percent
on refined palm oil.
The duties compare to 45 percent for crude soyoil and 50.8
percent on refined soyoil, driving buyers to switch to soyoil.
Indian traders said COP and refined palm oil prices have
fallen in the last one month and any reduction would be "suicidal
for the local industry".
"The CPO is down to $203 a ton and refined oil has also
fallen. We do not see the import tariff coming down," a leading
oil importer said from the western city of Ahmedabad.
"We rather want the government to increase duty on soyoil as a
safeguard measure so that its import does not hurt prices,"
B.B.Mehta, Executive Director of Solvent Extractors Association
of India (SEAI) told Reuters.
Analysts said India might consider a small reduction in palm
oil duties if there are possibilities of counter trade of rice.
"We have huge stocks of rice and Indonesia has a demand of two
million tons and if they agree to buy our rice then the
government might consider their case," a Bombay-based commodity
analyst said.
India had planned to export about two million tons of rice
from government stocks, which were at 20.7 million tons in
January this year.
But traders say the country was not likely to meet its target
due to lower global prices.