The Indian government has discontinued its tariff rate quota on soyabean oil and extended its lower duty policy for refined palm oil imports, the United States Department of Agriculture (USDA) reported.
Introduced in a bid to support domestic soyabean oil producers and increase crushing, the measures were likely to supplement sharply rising refined palm oil imports in the 2022/23 (October-September) marketing year, according to the Foreign Agricultural Network (FAS)’s Global Agricultural Information Network (GAIN) 23 January report.
“Domestic soyabean oil prices have stabilised following a turbulent 2022 in which the Indian government allowed concessional import duties on soyabean and sunflower oils to curb both high edible oil prices and rising inflation,” the USDA report said.
Soyabean oil imports are forecast to drop in the near term due to both higher domestic supply and edible oil stocks, according to the report.
Announced by India’s Ministry of Commerce and Industry/Directorate General of Foreign Trade (DGFT) in a public notice on 11 January, the move amended the previous tariff rate quota of 2M tonnes for soyabean oil. Previously, the policy had allowed a zero per cent duty in Indian fiscal years 2022/23 (1 April-31 March) and 2023/24.
However, the revised quota would apply only to 2022/23, with 31 March 2023 as the final date of allowable imports under the reduced quota, the report said.
From 1 April 2023, a 5.5% import duty would be imposed on soyabean oil imports.
Meanwhile, India’s tariff rate quota for 2M tonnes of sunflower oil through 2023/24 at a zero percent duty remained in effect, the report said.
The extension of lower duties for refined palm oil product imports, including refined, bleached and deodorised (RBD) palm oil and RBD palm olein, was announced separately by the DGFT on 28 December.
According to the order, RBD palm oil product imports will remain at the reduced 12.5% basic customs duty until the government takes further action.
The Indian government’s measure was likely to continue adding to sharply rising palm oil imports as it had in the 2021/22 marketing year (October-September), when volumes reached 2.1M tonnes, representing a 174% year-on-year growth, according to the USDA.
“The continued lower import duty for refined palm oil has greatly benefitted domestic palm oil refineries who have favoured refined RBD palm oil over crude palm oil due to the minimal difference in customs duties,” the report said.