Cooking oil is likely to become cheaper after the Centre reduced the basic customs duty (BCD) on several edible oils.
The duty cuts will be effective from September 24, the finance ministry said in a notification, according to ANI. The duty on crude soybean oil and crude palm oil has reportedly been cut from 10% to 5%, while the duty on refined soybean oil and refined palm oil has been reduced from 32.5% to 27.5% .
The government has also reportedly abolished the duty on crude sunflower oil, reducing it from 10% to nil. The duty on refined sunflower oil has been lowered from 32.5% to 22.5%.
Vegetable oil prices in India have risen by nearly 20% over the past year, and a measure to lower prices could boost consumption during the September-November festive season, when demand for sweets, snacks and fried foods typically increases, Reuters reported. The duty cuts are expected to reduce the import cost of edible oils, potentially easing prices for consumers, depending on how the reduction is passed through the supply chain.
The increase in Indian demand could also support benchmark Malaysian palm oil and US soyoil futures, analysts said. India imports nearly two-thirds of its vegetable oil requirements, mainly palm oil, soyoil and sunflower oil, from countries including Malaysia, Indonesia, Argentina, Russia and Ukraine, according to Reuters.
