TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

India likely to raise vegetable oil import taxes to help support local farmers

India meets nearly two-thirds of its vegetable oil demand through imports, with palm oil mainly bought from Indonesia, Malaysia and Thailand, while soyoil and sunflower oil imported from Argentina, Brazil, Russia and Ukraine.

Rajendra Jadhav and Mayank Bhardwaj (Reuters)
New Delhi/Mumbai, India
Sat, February 22, 2025 Published on Feb. 21, 2025 Published on 2025-02-21T23:49:31+07:00

Change text size

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
India likely to raise vegetable oil import taxes to help support local farmers Shoppers purchase packets of vegetable oil at a supermarket in Mumbai, India, on March 7, 2022. (Reuters/Rajendra Jadhav)

I

ndia is likely to raise import taxes on vegetable oils for the second time in less than six months to help support thousands of oilseed farmers reeling from a crash in domestic oilseed prices, two government sources said on Friday.

The hike in import duties by the world's largest importer of edible oils could lift local vegetable oil and oilseed prices, while potentially dampening demand and reducing overseas purchases of palm oil, soyoil and sunflower oil.

"[The] Inter-ministerial consultations regarding duty hike are over," said a government source, who did not wish to be named as he was not authorized to talk to the media. "The government is soon expected to raise the duties."

The government would take into account the impact of the decision on food inflation, said another government source who also did not wish to be identified, citing official rules.

A government spokesperson did not immediately respond to a request from Reuters for comment.

In September 2024, India imposed a 20 percent basic customs duty on crude and refined vegetable oils. After the revision, crude palm oil, crude soyoil, and crude sunflower oil attracted a 27.5 percent import duty, compared to 5.5 percent previously, while refined grades of the three oils now have a 35.75 percent import tax.

Prospects

Every Monday

With exclusive interviews and in-depth coverage of the region's most pressing business issues, "Prospects" is the go-to source for staying ahead of the curve in Indonesia's rapidly evolving business landscape.

By registering, you agree with The Jakarta Post's

Thank You

for signing up our newsletter!

Please check your email for your newsletter subscription.

View More Newsletter

Even after the duty hike, soybean prices are trading more than 10 percent below the state-set support price. Traders also expect winter-sown rapeseed prices to fall further once new-season supplies begin next month.

Domestic soybean prices are around 4,300 rupees ($49.64) per 100 kilograms, lower than the state-fixed support price of 4,892 rupees.

Due to lower oilseed prices, it makes sense to raise import duties on edible oils, said the first official, adding that the exact amount of the hike has not yet been decided.

Oilseed farmers are under pressure, and they need support to maintain their interest in oilseed cultivation, said B.V. Mehta, executive director of the Solvent Extractors' Association of India.

Reuters on Thursday reported that Indian refiners have cancelled orders for 100,000 metric tons of crude palm oil scheduled for delivery between March and June, partly due to the likely hike in import duties.

India meets nearly two-thirds of its vegetable oil demand through imports. It buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.

Share options

Quickly share this news with your network—keep everyone informed with just a single click!

Change text size options

Customize your reading experience by adjusting the text size to small, medium, or large—find what’s most comfortable for you.

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!

Continue in the app

Get the best experience—faster access, exclusive features, and a seamless way to stay updated.