India is considering raising import duties on vegetable oils to help protect farmers suffering from lower oilseed prices, two government sources said on Wednesday.
The measure could reduce demand and reduce purchases of Palm oil, soy oil and Sunflower oil abroad.
“We are exploring all options to help farmers.” A government source, who asked not to be identified in accordance with official rules, said raising import taxes was one option.
A government official, who also declined to be identified, said the Revenue Department, part of the Finance Ministry, has already made a proposal and will make the final decision.
A government spokesman did not immediately respond to a request for comment.
In 2022, India, the world’s largest importer of vegetable oil, abolished basic import duties on crude vegetable oils to bring down prices. New Delhi still levies a 5.5% tax, known as the “agriculture infrastructure and development cess.”
Higher import tariffs
Farmers say higher import tariffs will help stem a sharp drop in oilseed prices.
Currently, soyabean prices are at Rs 4,200 per 100 kg, below the state support price of Rs 4,892.
Farmers in Maharashtra, India's second-largest soybean-producing state, are unhappy with falling prices.
“At the current price, we are not even covering our production costs, let alone making a profit,” said Maces Gaikwad, a farmer who grows soybeans on a 4-acre (1.62-hectare) plot.
In July, India's vegetable oil imports rose 22.2% to 1.9 million tonnes, the second highest on record.
India meets over 70% of its vegetable oil demand through imports. The country purchases palm oil mainly from Indonesia, Malaysia and Thailand. While it imports soybean oil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Source: Rajendra Jadhav and Mayank Bhardwaj | Notícias Agrícolas
