Govts Failure To Revise Oil Import Tariff Evokes Speculation

Mumbai, Aug 26 | Updated: Aug 27 2004, 05:30am hrs
Edible oil market is strife with speculation and distortion as the government has failed to revise tariff value for various oil imports. In last two months edible oil prices have come down by almost 15-25 per cent of the notified tariff value.

The speculation as to when the government will announce the change has caused distortion in the market. Some of the edible oil consignments have been postponed for delivery.

According to industry observers, the tariff value for import of various oils are much higher than the actual price in the international market. As on August 10, crude palm oil price on cost, insurance and freight (CIF) basis was $407 per metric tonne as against the notified tariff value of $504.

Similarly, CIF price of RBD Palm oil on August 10 was $437 as against tariff value of $ 543, other palm oil was quoted at $426 as against tariff value of $523, crude palmolien was quoted at $460, lower by $72 to tariff value of $532, RBD palmoien at $447, down by $105 then the tariff value of $552, other palmolein at $437, lower by $105 then the tariff value of $542 and crude soybean oil price at $560, down by $68 then the notified tariff value of $628.

The government had last notified the tariff value of various oils on May 31, 04 for the purpose of levying customs duty. Importers of edible oil have been facing uncertainity because of non-revision in the tariff value despite the global prices ruling much lower since June.

It may be noted that during Oct-Nov 03 Oil year, the tariff value was changed thrice. Ministry of finance notifies the tariff value based on the price changes in the international market.

However, it has been more than two months now and the government has yet not announced revision in the tariff value. Industry associations have been representing the government on the issue in vain.

We have requested the government to revise the tariff value as the prices of various oils have declined and are lower than the notified tariff value, BV Mehta, ED, the Solvent Extractors Association of India (SEAI) said.