At present, the effective duty on soyabean oil is 45%. The government has recently slashed the effective duty on a wide range of vegetable oils with a view to facilitate cheap imports in the backdrop of the rising prices of essential commodities. The tariff duty on soyabean oil was not reduced in this exercise. The tariff vales of all vegetable oils have remained unchanged.
The Brazilian minister of development, industry and foreign trade, Miguel Jorge, who was recently in Delhi, had advised India to make tariff cut on soyabean oil. He said that Brazil would take steps to reduce taxes and levies on production of soyabean products to make them cheaper for exports.
In an exercise to keep prices under check in the election year, the government begun discoursing exports of about 50 items including steel, non-basmati rice, cement, manganese, ferro chromes by withdrawing the DEPB benefits. Exports of vegetable oils have been banned. The minimum export price of Basmati rice has been raised to Rs 1100 a tonne and that of non-Basmati rice to Rs 1000 a tonne. The Union cabinet is also slated to consider extension of DEPB benefits on other exportable commodities for a year more.
The apex body of the vegetable oil industry, Central Organisation for Oil Industry and Trade (COOIT) has expressed dissatisfaction over the government's decision to cut tariffs on vegetable oils. "The effective duty on crude oil at today's prices works out to only about 8% because of freezing of tariff values at August 2006 level, which is very low indeed and it will help the exporting countries, to the detriment of farmers and consumers in India specially at the time when rapeseed/mustard crop is under harvest," said COOIT chairman Davish Jain.
He furthers said, "It has been our experience in the past that the advantage of duty cut is taken by the exporting countries, rather than the consumers and this time also, exporting countries have jacked up the crude palm oil (CPO) prices by $80 per tonne in the last two days negating the anticipated benefit to our consumers as a result of reduction in duty. In the process, the government has also lost considerable amount of revenue from import duties."
However, the Indian Vanaspati Producers' Association (IVPA) has welcomed the decision to slash tariff on CPO to 20%.
CPO is used by the industry for producing hydrogenated oil (vanaspati).