India to raise duties on edible oil imports again

Source: Oleoscope (Russia)

India is likely to raise import duties on edible oils for the second time in less than six months to support thousands of oilseed farmers. A hike in import duties by the world’s largest importer of edible oils could push up domestic prices of oil and oilseeds, while potentially reducing demand and cutting foreign purchases of palm, soybean and sunflower oil.

“Inter-ministerial consultations on the duty hike have been finalized and the government’s decision is expected soon,” Reuters quoted its government sources as saying.

India imposed a 20 percent basic customs duty on crude and refined vegetable oils in September 2024. Following the revision, crude palm oil, soybean oil and sunflower oil were subject to an import duty of 27.5%, up from 5.5% earlier, while refined varieties of the three oils were subject to a duty of 35.75%.

Oilseed farmers are under pressure and they need support to maintain interest in oilseed cultivation, said B V Mehta, executive director of the Oil Producers Association of India. At the moment, even after the duty hike, soybean prices are more than 10% below the support price set by the government. Domestic soybean prices in India are around 4,300 rupees ($49.64) per 100 kilograms, below the government’s fixed support price of 4,892 rupees. Traders expect winter rapeseed prices to also fall once new season supplies begin next month.

India meets nearly two-thirds of its vegetable oil demand through imports. It buys palm oil mainly from Indonesia, Malaysia and Thailand, while soybean and sunflower oil is imported from Argentina, Brazil, Russia and Ukraine.

Earlier it became known that Indian oil refineries canceled orders for 100,000 tons of crude palm oil, delivery of which was scheduled for the period from March to June, partly because of the likely increase in import duties.