India, the world's largest edible oil importer, on Wednesday slashed customs duty on RBD Palm oil to 70 per cent from 85 per cent but traders here said it is unlikely to have any significant impact on imports.
The industry has also welcomed the government's move to fix a specific rate of Re 1 per kg excise duty on refined edible oils and Rs 1.25 a kg on vanaspati both for branded or otherwise.
Winding up discussion on the Finance bill in the Lok Sabha, Finance Minister Jaswant Singh announced the duty cut on RBD palm oil and also exempted the commodity from special additional duty of little over 4 per cent.
Traders, however, said it will not be cost effective to import RBD palm oil which has so far not been imported at all in the current November-October season.
The ex-Kandla price of RBD palm oil will be around $465 a tonne against $442 for crude palm oil, Sat Narain Agarwal, General Secretary Rajdhani Vegetable Oils Suppliers Association, said.
He said the base price or tariff value at which duty is imposed is also lower for CPO at $432 a tonne against $460 a tonne for RBD palm oil.
Meanwhile, official sources said nearly 99 per cent of the imports of edible oils are in the crude segment and the latest duty cut is in line with the demand of Gujarat and Andhra Pradesh governments for cheaper imports in interest of consumers in the wake of drought last year.
Agarwal said with anomalies in vanaspati excise duty structure having been corrected, domestic prices of edible oils should marginally fall.
