TNFNew Delhi/ TNF
To curb the falling prices of oilseeds, the government has increased import duties on soybean, sunflower, and palm oil, effective September 14. This move aims to benefit farmers by potentially halting the price decline in the domestic market. According to government data, refined oil prices have been falling for 18 months, with a 4.6% decrease in August. The drop in prices has led to a surge in palm oil imports, which increased by 30% in the first half of 2024 compared to the previous year. Imports of sunflower seeds, safflower, and cottonseed oil also rose by 55% during the same period.
How Much More Expensive Is Import?
To prevent farmer losses, the Finance Ministry issued a notification on September 13, raising the basic customs duty on crude soybean, sunflower, and palm oil from zero to 20%. Additionally, the duty on refined oils has increased from 12.5% to 32.5%. As a result, the effective duty on crude soybean, sunflower, and palm oil will be 27.5% instead of 5.5%, while the duty on refined oils will be 35.75% instead of 13.75%.
Dependency on Imports
India relies on imports for 70% of its oilseed needs. Previously, lower duties were implemented to shield consumers from rising global commodity prices. However, with domestic prices now falling, the government has adjusted its approach to protect farmers. The area under oilseed cultivation has increased by 1.2% to 1.92 million hectares as of September 12. Additionally, the government has removed the minimum export price limit on onions to promote exports, benefiting farmers, especially in Maharashtra, where assembly elections are scheduled this year.
