NEW DELHI: India's farm ministry has proposed that the government cut the 30 percent import duty on oilseeds in the budget to be unveiled on Saturday to help local refiners make use of unutilised capacity, a senior ministry official said.
The world's leading cooking oil importer buys nearly 60 percent of its annual demand of 18-19 million tonnes from countries such as Indonesia and Malaysia, but refiners are operating at only 40-45 percent of their capacity of 20 million tonnes.
This has prompted the Solvent Extractors' Association of India (SEAI), a grouping of refiners, to lobby the government to make cheaper oilseeds available in the country by cutting the duty to 10 percent.
A poor monsoon last year is expected to cut India's rapeseed and sunflower output in the current crop year to June, squeezing supplies for the $25 billion cooking oil industry.
"We have sent a proposal to cut the import tax on oilseeds to the finance ministry for its call in the budget," the farm ministry official told Reuters. A cut would also help bring down inflation, the official added, declining to be named.
Spokesmen for the farm and finance ministries declined to comment. India's annual oilseeds output has stagnated at 29-33 million tonnes in the last five years despite the government's attempts to raise cooking oil supplies beyond 7-8 million tonnes.
A cut in the duty could open up new markets for rapeseed suppliers in the European Union, Canada and Australia. Sunflower seed suppliers in Ukraine and Russia would also benefit.
However, a Melbourne-based trader said Australian supplies may not flow in instantly. "We are comfortably selling our supplies to China and Europe," the trader said.
Comments
Comments are closed.