GCPL, HUL, other key FMCG shares rise up to 3% on cut in crude edible oil import duty

Shares of select FMCG companies have posted strong gains on June 2 after the Centre lowered basic import tax on crude edible oils, pushing the the Nifty FMCG index in the green on a subdued trading session.

The government reduced basic customs duty on crude palm oil, crude soy oil and crude sunflower oil from 20 percent to 10 percent, according to a notification reviewed by Reuters. The decision, effective May 30, is expected to stimulate domestic demand, leading to increased import of palm oil, soy oil and sunflower oil, as well as lower edible oil prices.

FMCG companies that are users of these oils are set to benefit from the decision.

Shares of Godrej Consumer Products were the top gainer on the index, rising nearly 3 percent. The company uses palm oil in its soaps, detergents and other items. Earlier in May, GCPL's management had said that its quarterly margins were dented by soaring palm oil prices.