India to allow edible oil imports at lower duty until March 2025
16.01.2024 (Reuters) - MUMBAI, Jan 16 (Reuters) - India will extend edible oil imports at a lower duty by another year until March 2025, the government said in a notification issued late on Monday, as the world's biggest vegetable oil importer moves to contain local prices.
The lower import duty structure on crude palm oil, crude sunflower oil and crude soyoil was set to expire in March 2024.
"The decision was expected as the government is keen to keep prices in check ahead of elections," said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.
India's annual retail inflation rose at the fastest pace in four months in December, driven by a rise in prices of some food items.
To bring down prices, the government banned wheat exports in 2022 and prohibited overseas shipments of non-basmati white rice last year. New Delhi has also halted mills from exporting sugar this year.
India would continue with its export curbs on wheat, rice and sugar for now, trade minister Piyush Goyal said on Saturday.
"The notification is not changing the current duty structure. So, there won't be any impact on local prices or import patterns," Bajoria said.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
India's palm oil imports rose to their highest in four months in December as purchases of refined palmolein surged because of competitive prices.
While the government aims to maintain price stability, the long-term policy has adverse effects on local oilseed growers, said B.V. Mehta, executive director of the Solvent Extractors' Association of India.
"The pressure on oilseed prices from cheaper imports effectively discourages them from planting more," Mehta said.
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 lucrative.
Reporting by Rajendra Jadhav and Nikunj Ohri; Editing by Christian Schmollinger, Sohini Goswami and Subhranshu Sahu