Government defreezes import tariff on refined palm, links it to global rates

NEW DELHI: The government has approved a proposal to defreeze the import tariff value on refined palm oil from the exiting USD 484 per tonne and link it to current global prices.

"The Cabinet Committee on Economic Affairs has approved the proposal of Ministry of Consumer Affairs, Food and Public Distribution to defreeze the tariff value on imported RBD palmolein from USD 484 per tonne and align it with the current international prices," an official release said today.

The Cabinet Committee on Economic Affairs had met last evening. The unshackling of the import tariff value is aimed at curbing higher import of refined cooking oil and protect the domestic industry.

Tariff value is the base price on which custom duty is determined and is aimed to check under-invoicing by importers. It is fixed every fortnight on the basis of global prices.

However, since July 2006, the government did not tweak with the tariff value on refined palmolein at USD 484 per tonne as against the current global price of USD 1,000.

Lower tariff value on imported refined palmolein has boosted shipments in the last few years.

That apart, Indonesia has lowered export duty on refined palm oil from 15 per cent to 8 per cent, affecting domestic edible oil processors. Indonesia is the largest exporter of Crude Palm Oil (CPO) to India.

Between November 2011 and April 2012, about 9.19 lakh tonnes of RBD refined palmolein was imported against 4.87 lakh tonnes during corresponding period in previous year, recording an increase of 88.7 per cent.

In comparison, imports of CPO increased by 14.8 per cent from 21.72 lakh tonnes to 24.93 tonnes during the same period.

India imports more than half of its domestic requirement. While palm oil is being imported from Indonesia and Malaysia, soyabean oil comes from Argentina and Brazil.

India imported about 8.37 million tonne of cooking oils in 2010-11 marketing year and out of that palm oil contributed more than 50 per cent.