INSUBCONTINENT EXCLUSIVE:
India has put on hold a proposal to reduce import taxes on edible oilsIndia has put on hold a proposal to reduce import duties on edible
oils as cooking oil prices started to fall in the world market after hitting record highs, two government and one industry officials told
Reuters.The world's biggest vegetable oil importer was considering reducing duties after domestic soyoil and palm oil prices more than
doubled in the past year, hitting consumers already stung by record fuel prices and reduced incomes amid the COVID-19 pandemic."We are not
cutting import duties now, a more longer term solution has to be found
Cutting duties is not a sustainable solution," said a government official with knowledge of the matter who asked not to be identified.A
second official, who also requested anonymity, said the decision to leave the import duty structure unchanged was taken as prices were now
cooling in the overseas market, pulling the domestic prices lower too."The idea is to keep a close watch on international prices and global
supplies, and if the situation warrants it, we'll revive the proposal for a reduction in the duty to protect the interests of both consumers
and farmers," this official said.Yet even after the recent correction of more than 20 per cent, Indian edible oil prices are still around
double their levels a year ago.Household consumption is expected to decline the longer prices remain elevated.Demand from bulk buyers like
hotels, restaurants and bakeries had already dropped after authorities imposed local lockdowns in response to a devastating second wave of
coronavirus infections over recent months, dealers said.While India deliberated lowering import duties on vegetable oil, benchmark palm oil
prices in Malaysia fell nearly a quarter in the last one month, giving some respite to importing countries.India meets nearly two-thirds of
its edible oil demand through imports, levying a 32.5 per cent duty on palm oil imports, while crude soybean and soy oil are taxed at 35
per cent.It buys palm oil from Indonesia and Malaysia, and soy oil and sunflower oil come from Argentina, Brazil, Ukraine and Russia.Aside
from reducing government revenues, any reduction in import duty could give overseas suppliers an opportunity to raise prices, as palm oil
exporters have done in the past, the first official said."This should not be repeated,” the official said.New Delhi has been trying hard
to increase oilseed production and reduce dependency on expensive imports."We told government this is not the right time to cut taxes
Farmers have started soybean and groundnut sowing
The duty cut would give them a wrong signal," said a senior industry official.Indian farmers have started sowing soybean and groundnut in
southern and western parts of the country as the monsoon has covered around two-third of the country.
