Palm oil prices will fall immediately; This is the reason

The Central Government has taken steps to reduce the skyrocketing price of cooking oil. The tax cuts were aimed at boosting domestic production of palm oil and curbing inflation in the markets. The basic customs duty on refined palm oil has been reduced from 17.5 per cent to 12.5 per cent till March next year. The government action will be of great relief to the hotel and restaurant businesses that use it extensively in Palmyra. It is estimated that with the fall in palm oil prices, the prices of coconut oil and herbal tea may also come down.

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According to the Solvent Extractors Association of India, the levy on refined palm oil and palm oil (including social welfare cess) will be reduced from 19.25 per cent to 13.75 per cent with the reduction of basic customs duty. The Central Board of Indirect Taxes (CBEC) has announced a reduction in customs duty on palm oil. According to the Ministry of Consumer Affairs, the average retail price of groundnut oil on Monday was Rs 181.48 per kg, mustard oil Rs 187.43 per kg, forest oil Rs 138.5 per kg, soybean oil Rs 150.78 per kg, sunflower oil Rs 163.18 per kg and palm oil Rs 129.94.

Atul Chaturvedi, president of the Solvent Extractors’ Association of India, said the reduction in excise duty on crude palm oil, a raw material for refineries, would reduce import duty on refined palm oil, which is contrary to the Atmanirbhar Bharat declaration. He added that the move would be detrimental to job creation and value addition in India. In addition to reducing the customs duty on refined palm oil, the government on Monday decided to allow traders to import refined palm oil without a license for another year till December 2022.

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It is also worth reading at this stage that the market regulator SEBI yesterday imposed a ban on the initiation of new derivative contracts for crude palm oil and some other agricultural products. All these measures have been taken at a time when wholesale price inflation is on the rise. To control the rise in edible oil prices, the government has slashed import duty on refined and crude edible oils several times this year. The government last reduced the import duty on October 14.

It is estimated that the country imports 65 per cent of the total oil required. It’s about 22-22.5 million tonnes. In the last two marketing years (November to October), the amount of oil imported by Kovid has dropped to about 13 million tonnes. The increase in imports is a setback to the country’s balance sheet and growth.

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