India makes refined palmolein imports more costly
(Reuters) - India has lifted a six-year old freeze on the base import price of refined palmolein, Food Minister K.V. Thomas said on Thursday, a move that will make palm oil imports from Indonesia more costly and help protect domestic refiners.
Indonesia, the world's top palm oil producer, tweaked its tax structure last year to promote refined products, hurting domestic industries in major buyers such as India.
The Indonesian policy nearly doubled India's refined palmolein imports to 1.2 million tonnes for the first eight months of the current year from November in comparison with the year-ago period.
India's move effectively doubles import taxes on refined palmolein at current market prices.
India used to calculate import duty based on a fixed base price and had not raised this since 2006, when the government was battling high food prices.
That base import price for refined, or RBD, palmolein was $484 per tonne.
Switching from the base price will make overseas purchases costlier as a 7.5 percent import duty on the refined palm oil will be calculated on the basis of market price which is around $1,050 per tonne.
"This step will provide relief to the domestic refining industry," said B.V. Mehta, executive director of the Solvent Extractors' Association of India (SEA), a refiners' body.
India imports more than half of its total vegetable oil consumption of about 16 million tonnes annually. The bulk is made up of palm oils from Indonesia and Malaysia and there are much smaller shipments of soyoil from Brazil and Argentina.
Separately, the Indian government decided to raise the floor price that mills must pay to farmers for sugarcane for the current crop season, running from July 2012 to June 2013.
Mills will now have to pay at least 170 rupees per 100 kg for purchasing cane from farmers, up 17.24 percent from last season, a move aimed at expanding planting in the world's No. 2 producer after Brazil.
Source : in.reuters.com