The Government has almost doubled the base price or tariff value for import of crude edible oils linking it to global prices of the commodity. However, there is no change in the base price for refined oil imports.

The base price for crude palm oil (CPO) has been hiked to $802 a tonne from the earlier $447. For refined, bleached and de-odourised (RBD) palm oil, the base price now stands at $853 against the earlier $476.

For crude palmolein, the base price has been set at $860 from $481 earlier , while for crude soyabean oil the base price has been more than doubled to $1,190 a tonne from the earlier $580 a tonne.

More imports feared

The latest tariff revision follows the recent levy of 2.5 per cent import duty on crude edible oils to protect domestic oilseed growers from cheap imports from Malaysia and Indonesia.

The refined oils attract an import duty of 7.5 per cent.

The edible oil industry fears that the latest hike in tariff value would result in more import of refined oil affecting the domestic refiners.

“The hike in base import price for crude edible oils will reduce the price difference between crude and refined palm oils to around 5 per cent from the earlier 7.5 per cent,” said B.V. Mehta, Executive Director, Solvent Extractors Association of India (SEAI).

The reduction in price difference will prompt importers to bring in more of refined oils and would indirectly encourage value addition in the producing countries.

“It will be detrimental to the local refiners and their capacity utilisation will be hit,” Mehta said.

India is the largest edible oil importer and palm oil account for about 80 per cent such imports.

Edible oil imports have been on the rise on growing domestic consumption.

For the edible oil year ending October 2012, India’s imports stood at almost 10 million tonnes.

The edible oil imports were up 35 per cent in December 2012 at 9 lakh tonnes over corresponding period last year’s 6.69 lakh tonnes.

> Vishwanath.kulkarni@thehindu.co.in

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