The Indian government has extended the lower duty on edible oil imports by another year until March 2025 in a bid to control food inflation, Reuters reported on 16 January.
India’s lower import duties on crude palm oil (CPO), crude sunflower oil and crude soyabean oil had been set to expire in March, the 16 January report said.
“The decision was expected as the government is keen to keep prices in check ahead of elections,” Sandeep Bajoria, CEO of vegetable oil brokerage Sunvin Group, was quoted as saying.
India’s annual retail inflation increased at its fastest pace in four months in December, driven by a rise in prices of some food items, Reuters wrote.
The country buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyabean oil and sunflower oil from Argentina, Brazil, Russia and Ukraine, according to the report.
India’s palm oil imports rose to their highest level in four months in December as purchases of refined palm olein surged due to competitive prices.
While the government aims to maintain price stability, the long-term policy has adverse effects on local oilseed growers, according to BV Mehta, executive director of the Solvent Extractors’ Association of India.
“The pressure on oilseed prices from cheaper imports effectively discourages [farmers] from planting more,” Mehta was quoted as saying.
India, which meets more than two-thirds of its edible oil requirements through imports, has been struggling to increase oilseed production as farmers find other crops more profitable, according to the report.
