New Delhi May 25 2022: India has waived all taxes on an annual import of 2 million mt crude soybean oil and crude sunflower oil each, the finance ministry said May 24.
The ruling comes into force from May 25 and will be effective for two years, until March 31, 2024, the ministry said in a notification.
India is the world’s largest importer of vegetable oils and buys 13 million-15 million mt annually, of which sunflower and soybean oils account for nearly 35%-40%, with palm oil accounting for a major share of imports.
This move may price out palm oil imports which are anyway being heavily choked due to Indonesia’s clampdown on exports. However, how this quota will be assigned and to whom will be key here, multiple India-based trade sources told S&P Global Commodity Insights.
There won’t be an immediate relief in retail and wholesale prices of these vegetable oils as traders will need to seek their import quota from the government. The soybean oil purchase has ample options such as Argentina, Brazil or the US, but it will be difficult to seal orders for crude sunflower oil as Russia remains the sole supplier of the commodity in region,” said Rahul Chauhan, director of agro commodity research firm IGrain India.
Exports of sunflower oil from Ukraine, the world’s largest exporter, have been disrupted since February due to the Russia-Ukraine war.
Prior to India’s May 24 waiver, crude soybean oil, crude sunflower oil and crude palm oil imports were effectively taxed at 5.5%.
This order will provide significant relief to consumers, the Central Board of Indirect Taxes and Customs said May 24.
India’s retail and wholesale inflation hit multi-year highs in April, with retail inflation soaring to a near eight-year high of 7.79 %, country’s statistics department said in May.
The relief on sunflower and soybean oil imports came amid a slew of government measures on crucial commodities including crude oil and soybean meal to contain rising domestic prices.
