The finance ministry is unlikely to review import duty on edible oils at present. It has said it will not impose import duty on edible oil unless inflation levels fall further. The agriculture ministry had mooted a duty hike to protect the domestic industry from the declining oil prices in international markets.
Food and agriculture minister Sharad Pawar had recently said that the government would review the duty on edible oil after Diwali.
?Global edible oil prices have fallen and have created problems for producers. We will soon decide on imposing duty on imports,? he had pointed out.
While in the past few weeks, inflation has declined marginally to 11.07%, and prices of edible oils in the domestic market have also gone down slightly; inflation continues to be a cause of concern for the government. As a finance ministry official said, ?We need to wait till inflation falls to single digit levels again, before we can think of hiking the import duty.?
In an effort to curb soaring inflation levels, the government in April this year had scrapped import duty on edible oils.
It was hoped that it would help bring down domestic prices. It had also ordered to decrease import duty on refined edible oil (covering palm oil, sunflower oil, soybean oil, coconut oil, groundnut oil as well as other edible oils) from 27.5% to 7.5%, while import duty on hydrogenated vegetable oils and fats has been slashed by 7.5%.
However, international as well domestic prices of the commodity have now significantly cooled down. Prices of palm oil, the key benchmark of global edible oil market that directly impacts Indian prices as the country is the world?s second largest importer, has declined by half this year, lowering purchase costs for India.
In fact, thanks to the lower prices in the global market, domestic edible oil prices have gone down by Rs8,000 per tonne to Rs20,000, according to the Solvent Extractors Organisation.