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Govt slashes import duty on refined palmolein, crude palm oil

02 Jan 2020 Evaluate

Amid industry oppositions, the government has slashed import duty on refined palmolein to 45% from 50%, while that on crude palm oil (CPO) to 37.5% from 40% with immediate effect. The duty cut has been made under the ASEAN agreement and the India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA).

The industry body, the Solvent Extractors' Association of India (SEA) had opposed this move saying it will hurt domestic refiners. It said that after the reduction in import duty, the tax difference between CPO and refined palmolein has reduced from 10% to 7.5%. This will have serious impact on domestic palm oil refining industry and oilseeds farmers.

It also said after a long time, the domestic oilseeds had started selling their produce above the minimum support price (MSP). Lower import duty would make it difficult to defend MSP and the new found enthusiasm of the oilseed farmers would be dampened. The country's edible oil imports are now touching 70% of the consumption. It added that the duty cut would be counterproductive and contrary to the government's stated objective of increasing domestic oilseed production.

Asserting that India too should protect the interest of farmers like Malaysia and Indonesia, the SEA said Indonesia from January 1 has imposed export duty of $50 on CPO and $30 on refined palmolien. Similarly, Malaysia has imposed export duty of $31 on CPO and zero duty on refined palmolein which work out to be nearly 5% on CPO value, thus effective duty difference is hardly 2.5% only.

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