The Hindu Business Line : `Edible oil market has discounted cut in additional duty'

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Mumbai March 1 The edible oil market has already discounted the Centre's decision to withdraw the 4 per cent special additional duty on imports. In fact, it had also anticipated a 5-10 per cent duty cut on palm and soya oils. In view of the market discounting the move, prices of edible oils are likely to rule stable, according to the Solvent Extractors Association.

On the other hand, the reduction of duty on crude sunflower oil from 65 per cent to 50 per cent would not have much impact on quantum of import of sunflower oil since under tariff rate quota 1.5 lakh tonnes ofcrude sunflower oil is allowed to be imported at 50 per cent duty, the association said. Annual import of the oil is about one lakh tonnes.

The positive aspects for the solvent extractors are cut in Customs duty on Food Processing Machinery and their parts from 7.5 per cent to 5 per cent and no excise duty on bio-diesel (alkyl esters of long chain fatty acid) from vegetable oils, it said.

The Soyabean Processors Association of India (SOPA) also said the market had already discounted the four per cent cut in additional duty.

Begging to differ with the Centre's view that edible oils had contributed substantially to inflation, he said average prices of soyabean oil on February 27 were ruling at Rs 413 for 10 kg when the inflation rate was 6.63 per cent, while it sold at Rs 430-435 in January when the inflation rate was only 6.3 per cent."Increase in inflation rate may be due to reasons of other high priced edible oils such as groundnut and sunflower oils and foodgrains and pulses. The Government has rightly reduced the duty on both crude and refined sunflower oil by 15 percentage points," Mr Rajesh Agrawal, spokesman for SOPA said.Mr Anil Agrawal, Director, Sanwaria Agro Oils Ltd, said: "A very good thing is that the Government did not levy excise duty on edible oils, as was expected in some quarters."

Mr Dinesh Shahra, Managing Director, Ruchi Soya Industries Ltd said the impetus given to agriculture would have a positive impact on food production and augur well for the farmers. Ruchi soya would also stand to gain from the move to withdraw excise on food processing and reduction of the duty on plastic, especially on the packaging front.

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