Starting September 14, India will implement higher import duties on crude and refined soybean, sunflower, and palm oil to protect domestic farmers from declining oilseed prices. The latest data from the government reveals that refined oil prices have been in deflation for the past 18 months, with a 4.6 percent drop in August.
A finance ministry notification issued on September 13 has increased the basic customs duty on crude soybean, sunflower, and palm oil from zero to 20 percent. The duty on refined oils has been raised to 32.5 percent from 12.5 percent.
The price drop has led to a surge in palm oil imports. In the first half of 2024, India’s palm oil imports rose by 30 percent compared to the previous year. Similarly, imports of sunflower seed, safflower, and cottonseed oil increased by 55 percent during the same period.
With these changes, the effective duty now stands at 27.5 percent for crude oils and 35.75 percent for refined oils, compared to 5.5 percent and 13.75 percent, respectively, under the previous structure.
India relies on imports to meet over 70 percent of its oilseed demand. The previous lower duty rates were introduced to shield consumers during times of rising global commodity prices. The reversal aims to address the negative impact on domestic farmers due to the price decline.
In other agricultural news, oilseed sowing has increased, with acreage up by 1.2 percent to 19.2 million hectares as of September 12. Additionally, the government has removed the minimum export price limit on onions, which is expected to boost exports and benefit farmers, particularly in Maharashtra, a state set to hold elections later this year.
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