Daijiworld Media Network - New Delhi

New Delhi, Feb 21: In a bid to support struggling oilseed farmers, India is likely to raise import taxes on vegetable oils for the second time in less than six months, government sources revealed on Friday.

The move, expected soon, aims to boost domestic oilseed prices, which have plummeted despite a previous duty hike in September 2024. However, it may also dampen demand and reduce imports of palm oil, soy oil, and sunflower oil.

“Inter-ministerial consultations regarding the duty hike are complete, and the government is expected to announce the decision soon,” said a government source, requesting anonymity. Another official emphasized that food inflation concerns would also be taken into account before finalizing the hike.

Currently, crude palm oil, crude soyoil, and crude sunflower oil attract a 27.5% import duty, while refined variants are taxed at 35.75%. Even after the previous revision, soybean prices remain over 10% below the government-set support price, with domestic rates hovering around Rs 4,300 per 100 kg against the support price of Rs 4,892.

The expected duty increase is seen as a necessary step to encourage farmers and maintain their interest in oilseed cultivation. "Farmers are under pressure, and they need support," said B V Mehta, executive director of the Solvent Extractors' Association of India.

Amid reports of a duty hike, Indian refiners have already cancelled orders for 100,000 metric tons of crude palm oil scheduled for delivery between March and June.

India, the world's largest importer of vegetable oils, meets nearly two-thirds of its demand through imports. It sources palm oil from Indonesia, Malaysia, and Thailand, while soy oil and sunflower oil are imported from Argentina, Brazil, Russia, and Ukraine.