Move to check inflationary spiral
Tariff values frozen at July 2006 levels for palm groupOilseeds acreage will be adversely affected, say extractors
NEW DELHI: In its continuing drive to contain inflation, especially the rise in prices of primary articles, the Central Government on Wednesday slashed the customs duty on edible oils by up to 12.5 percentage points while freezing their tariff values at levels prevailing in July 2006.
Announcing the cut in import duty, an official statement here said: "As part of its strategy to keep the prices of essential commodities under check, the Government had exempted customs duty on wheat and pulses. Today's reduction is the second such for edible oils.''
Accordingly, the duty on imports of refined bleached and deodorised palm oil, palmolein and other refined palm oils stands reduced from 80 per cent to 67.5 per cent. Alongside, the import duty on crude palm oil and palmolein has been reduced to 60 per cent from 70 per cent and that on crude sunflower oil has also been cut to 65 per cent from 75 per cent.
The duty on refined sunflower oil imports has also been cut to 75 per cent from 85 per cent, the statement said.
The reduction in customs duty, the Government said, would reduce the landed cost of these oils and have a softening effect on domestic prices. The tariff values for the palm group of oils, the statement said, would continue to remain frozen at July 2006 levels.
The Government's decision to cut customs duty on palm oil will result in a drop in prices by Rs. 2 a kg, but will adversely affect oilseeds acreage during the coming year because of fears of low support prices, B. V. Mehta, Executive Director of the Solvent Extractors' Association of India, told PTI from Mumbai.
The decision could also result in farmers realising lower than the Minimum Support Price because of the domestic bearish trend following an increase in import of the commodity, he said.
The association also said the reduction in the customs duty on edible oil would make little impact on inflation.