The effective duty on the crude and refined oils will increase from 5.5% to 27.5% and from 13.75% to 35.75%, respectively.
| Photo Credit: Reuters
“The Government’s decision to hike customs duty on crude palm and refined sunflower oil to 20% and 32.5%, respectively, will ‘hugely’ benefit farmers as it will increase their income,” a senior official said on Saturday (September 14, 2024).
The Government official also said that the decision to remove the minimum export price and slash the export duty on onions too would help farmers in the country.
According to a Finance Ministry notification, the basic customs duty on crude palm, soybean, and sunflower seed oil has been increased from nil to 20%.
Basic customs duty on refined palm, soybean and sunflower oil has been hiked from 12.5% to 32.5%.
The effective duty on these crude and refined oils will increase from 5.5% to 27.5% and from 13.75% to 35.75%, respectively.
“These are big support for soya and oilseed farmers. Farmers from Maharashtra and Madhya Pradesh will get hugely benefited as they account for significant production of these oil seeds,” the official said.
The official added that these measures were possible because of the effective management of the Government to contain domestic prices of edible oil, which have been falling continuously for nearly two years now.
“These are very smart moves by the Government to support soya farmers without affecting market sentiments,” the official said.
Besides Madhya Pradesh and Maharashtra, the other major oil seed-producing states are Gujarat, Rajasthan, Karnataka, Andhra Pradesh, Uttar Pradesh, Telangana, and Tamil Nadu.
The Government had previously fixed $550 per tonne as the Minimum Export Price (MEP), which essentially meant that farmers could not sell their produce overseas at a rate lower than this rate.
A Directorate General of Foreign Trade (DGFT) notification issued on Friday (September 13, 2024) removed the MEP with immediate effect.
The Government has also slashed the duty on onion exports to 20% from 40%. There is no export duty on ‘Bangalore rose onion.’
Last week, Consumer Affairs Secretary Nidhi Khare noted that the outlook for onion availability and prices in coming months remains positive as the kharif (summer) sown area has increased sharply to 2.9 lakh hectare till August from 1.94 lakh hectare in the year-ago period.
“About 38 lakh tons of onions are reported to be still in storage with farmers and traders,” she said.
Commerce and Industry Minister Piyush Goyal has said that with the removal of the MEP and reduction in export duty from 40% to 20%, onions can be exported in larger quantities.
“This decision, which will increase the income of farmers and exporters, will greatly encourage business in the agricultural sector,” he said on social media platform X.
On the removal of MEP on basmati rice, the Minister said that it would help increase exports and farmers’ income.
Published – September 14, 2024 11:40 am IST