The government is expected to lower the base import price of soyoil soon, but will hold off making a 10-per cent cut in the import tariff on crude palm oil until the Budget in February, industry officials said on Thursday.
India, the world's largest importer of edible oil, secures more than two-fifths of its needs overseas, mainly from Malaysia, Indonesia, Brazil and Argentina.
"I don't think the government will alter the duty structure now with only a few weeks left for the Budget," said Rajesh Agrawal, chairman of the Soybean Processors Association of India.
The annual Budget is usually presented on the last day of February.
A food ministry spokeswoman told Reuters there was no proposal from her department to cut the duties, but added the finance ministry could make changes in the Budget.
Finance ministry officials were not available for comments.
Domestic edible oil prices have risen more than 40 per cent in the last year due to a sharp fall in local oilseed output after poor rains and a surge in global prices.
There has been market talk that the government would reduce tariffs to provide relief to consumers. India has an 85-per cent basic import duty on refined oils, a 65-per cent duty on crude palm oil and a 45-per cent duty on soyoil.
Base import price
But traders said the government was expected in the next week to reduce the base import price of soy oil to $540-$550 a tonne from $600. The base import price is used to calculate tariffs.
"The reduction in the base import prices is overdue," said Atul Chaturvedi, senior vice president of Adani Exports, a leading importer of edible oils.
Base import prices are fixed by the government based on world trends to check revenue losses due to under-invoicing by some importers. The last revision was done on December 3.
Imported prices of crude soyoil were quoted at $528 a tonne CIF (cost, insurance and freight) at Indian ports on Wednesday, down from $588 a tonne in early December.
According to trade estimates, India's winter oilseed output fell 21 per cent from a year earlier to 9.72 million tonnes, and the summer output is expected to drop 4.9 per cent to 7.51 million tonnes due to the impact of the worst drought in 15 years.
India is likely to import 1.12 million tonnes of edible oils in January-March from 695,000 tonnes in the corresponding period of the previous year.
Oil imports fell 8.3 per cent from a year earlier to 4.43 million tonnes in 2001-02 (November-October), traders said.
