Edible oil duty cut: Foreign suppliers benefit

India may be the world's largest edible oil importer and consumer; but the import duty cut on edible oils that the government announced recently is helping the foreign suppliers, not the Indian farmers.

For instance, the government had reduced duty on crude palm oil from 88.8 to 51.5 per cent.

But traders lament that despite the duty cut, the average landed price of crude palm oil has gone up from $490 per tonne in August to $777 in May (currently, they are ruling at $830).

What

is more, imported crude palm oil prices have risen much higher than soya oil.

This is because while for other commodities, higher international prices generate additional customs revenues, duties for edible oils are levied on `tariff values'.

"The import duty reductions have only led to loss to the government and consumers in India," said a trader in Gujarat.

He lamented that the gainers are the suppliers from Malaysia and other countries that have jacked up their export prices.