India considers extra tax introduction on vegetable oil imports

India plans to impose an extra 5% tax on vegetable oil imports within weeks and use the revenue to help boost the country’s stagnating oilseed production, Reuters report.

"India currently imposes a 40% import tax on crude palm oil and 50% on refined palm oils. But shipments of refined palm oils from Malaysia have since January been taxed only at 45%, under an agreement with Malaysia. Those tax rates will officially remain the same, but all products will be subject to the planned 5% surcharge in addition," the message reads.

The country’s consumption of vegetable oils — including palm oil and soyoil — has trebled over the last 20 years as the population grew and incomes rose, while output has increased by less than a third.

India’s overall vegetable oil imports rose 4.6% to 11.3 million tons since the current oil marketing began in November 2018, according to the Solvent Extractors’ Association of India, a leading trade body. Vegetable oil imports in July surged 26% to 1.41 million tons, the highest since May 2013.

India’s edible oil imports are likely to rise 7.3% in 2019/20 to a record high as scanty monsoon rains in June and July could curtail crop yields of summer-sown oilseeds such as soybeans and groundnut, a leading industry official said last month.

In January-July 2019, Ukraine exported 3.79 million tons of sunflower oil for the amount of USD 2.59 billion. The data of the State Fiscal Service of Ukraine (SFSU) shows that the key importer of sunflower, safflower or cotton oil from Ukraine in the indicated period was India.