India Imposes Additional Tax on Palm Oil Imports to Help Farmers
(Bloomberg) -- India, the world’s biggest palm oil buyer, increased taxes on imports of the tropical oil’s crude variety to encourage farmers to boost domestic oilseed output.
Although the government cut the import duty on the crude variety to 15%, it imposed an additional levy of 17.5% to finance the development of agricultural infrastructure in the country, according to Finance Minister Nirmala Sitharaman’s budget speech in parliament Monday. The new taxes compare with a 27.5% duty, which was cut from 37.5% only in November.
Import duties on both crude soybean and sunflower oils were cut to 15% from 35%, while an additional tax of 20% was imposed. The effective taxes on the two vegetable oils stay the same even after the changes.
“It will help in containing import of palm oil and remove the undue advantage it had over soybean and sunflower oils,” said Atul Chaturvedi, president of the Solvent Extractors’ Association of India. “This should help protect the interest of mustard farmers, whose crop is ready for harvest.”
The duty changes may put some pressure on benchmark palm oil prices, which surged to their highest level in more than a decade in early January on supply concerns.
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