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India reduces import taxes on crude edible oil to reduce food prices

India has lowered the basic import duty on crude edible oil to 10%, according to the government. The world's largest vegetable oil importer is trying to lower food prices and support the local refinery industry.

Crude palm oil, soya oil and crude sunflower oils are subject to a customs duty.

The total import duty for the three oils will be reduced from 27.5% to 16.5%, as they will also be subject to the Agriculture Infrastructure and Development Cess and Social Welfare surcharge of India.

The Solvent Extractors' Association of India's (SEA) executive director, B.V. Mehta said, "This is a win for both the vegetable oil refiners and the consumers as the local prices will drop due to the reduction in duty."

The government has not changed the import duty for refined palm oil or refined soya oil. These oils are currently subject to a 35,75% import tax.

Mehta stated that the import duty difference between refined and crude oils has increased to 19,25%. This will encourage importers to bring crude edible oil instead of refined oil and boost local refining industries.

India imports more than 70% its vegetable oil. It imports palm oil, mainly from Indonesia and Malaysia, and soyoil, sunflower oil, and other oils from Argentina, Brazil and Ukraine.

Sandeep Bajoria is the CEO of Sunvin Group. A vegetable oil brokerage. He said that the reduction in basic duty will bring down the price of edible oil and help to revive the retail demand which has been subdued over the past few months. (Reporting and editing by David Evans, Susan Fenton and Rajendra Jadhav)

(source: Reuters)