Govt weighs 10% duty cut on crude palm oil

NEW DELHI: Prime Minister Atal Bihari Vajpayee is likely to announce a 10% cut in import duty on crude palm oil (CPO) during his Kuala Lumpur visit beginning on Saturday. The duty-cut is expected in the face of mounting pressure from Malaysia and domestic vanaspati industry which uses CPO as its principal raw material.
Disclosing this here, a top government official said, “up to 10% cut in the customs duty on CPO from the present 65% is under active consideration and if cleared a formal announcement is expected during Mr Vajpayee’s Kuala Lumpur visit�. Alternatively the announcement can also be made in the forthcoming Union Budget.
He said the matter has been deliberated upon with Malaysia’s primary industry minister Lim Keng Yaik on his visit to India this week.
Mr Yaik held closed door meetings with several ministers including food minister Sharad Yadav and finance minister Jaswant Singh on the issue. Crude palm oil is the single largest imported oil whose purchase has risen to 18.9 lakh tonne in the last season from 14.1 lakh tonne in ’00-01.
India’s edible oil imports could rise to an all time high of 55 lakh tonne or even more as domestic oilseeds output is pegged to fall to the lowest level in more than 13 years at 154 lakh tonne in ’02-03.
The official said domestic prices of edible oils after being on the lower side for nearly a decade are now on the upswing and cheaper imports can have a sobering effect on the market.
It will also benefit the refining industry and promote value addition of crude raw material apart from serving as a boon for the vanaspati manufacturers, he added.