Money > Budget > Budget News & Analysis FEBRUARY 20, 2002 | 20:10 IST    rediff.com 


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Traders see little change in vegoil duties

The government is likely to keep import duties unchanged on most edible oils in the coming Budget after raising the levies sharply a year ago, traders said on Wednesday.

"I don't think the government will change the current levies," B V Patel, president of the Solvent Extractors' Association of India, told Reuters.

He said farmers were comfortable with current duties which had helped domestic prices recover from lows.

India raised import levies on most crude edible oils in last year's budget to 75 per cent from a 35-55 per cent range, and on refined oils to 85 per cent from 45-65 per cent to curb imports and shore up domestic prices. The duty on crude palm oil was later lowered to 65 per cent in October.

The levy on soyoil imports remained unchanged at 45 per cent due to India's commitment to the World Trade Organisation.

Some traders said the government might cut the duty on CPO by five to 10 per cent from 65 per cent in the Budget on February 28, following requests from Indonesia and Malaysia.

India, the world's largest edible oil buyer, imports 60 to 70 per cent of its total oil imports in the form of palm oils, mainly from Indonesia and Malaysia.

Indonesian Trade and Industry Minister Rini Soewandi, currently visiting India, told reporters last week in Jakarta that she would hold talks with her Indian counterparts and ask them to lower the duties on CPO and its refined products by at least 10 per cent.

"Indonesia's CPO is not competitive in India because the import duty is much higher than on soyoil," she said.

Malaysia is also seeking a cut in duties on palm oils, traders said.

OILSEED DUTIES

Domestic industry organisations have also demanded a cut in customs levies on oilseeds to 15 per cent from 35 per cent to reduce oil imports and help processing units which are now operating at about 35 per cent of capacity.

"This measure may give a new lease of life to the troubled oil processing industry," said Mansukhbhai Patel, president of the Central Organisation for Oil Industry and Trade.

Traders said the government was sympathetic to their plea.

There was also speculation that India might raise duties on soyoil imports to protect domestic soybean producers.

An industry source said last week a farm ministry proposal to impose a higher tariff of 75 per cent on soyoil imports that exceed 500,000 annually, was opposed by the commerce ministry saying the measure would violate WTO obligations.

The share of soyoil in the country's total edible oil imports doubled to 31 per cent in 2000-01 (November-October) from 15.3 per cent in the previous year. On the other hand, the share of palm oil fell to 60 per cent from 68 per cent in the same period.

India imported a record 4.83 million tonnes of edible oil in 2000/01, up from 4.49 million tonnes a year earlier.

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