29/05/2012 (Business Recorder) - India is likely to end its freeze on the base import price of refined vegetable oils, government sources said on Monday, to protect its refineries from cheaper imports of palm oil from Indonesia, the world's top producer of the cooking oil. Edible oil refineries in India, the world's top vegetable oil importer, have been complaining about cheaper imports after Indonesia cut export tax on refined varieties and raised the duty on crude palm oil.

India has kept the base import price, used to calculate import tax irrespective of the purchase price, unchanged since 2006 when the government was battling high food prices. "There has been a freeze on base import price for some years now but there is a need to do away with the freeze on tariff value on refined vegetable oils. We also need to protect our domestic units," one of the sources said. Importers are currently taxed 7.5 percent duties based on the tariff value set at $484 a tonne - a low price to pay and bring in processed edible oils.

The food and finance ministries favour the lifting of the freeze, another source said. "But an inter-ministerial panel is expected to take a final call on this issue," he said, without giving a date for the meeting of the panel. India imports more than half of its total vegetable oil consumption of about 16 million tonnes annually. The bulk is made up of palm oil from Indonesia and Malaysia and there are much smaller shipments of soyoil from Brazil and Argentina. The industry expects ministers to lift the freeze.