All import restrictions on refined palm oil abolished till December 2021 to rein in edible oil prices

The government has finally removed import restrictions on refined palm oil till 31 December this year. This is expected to increase availability of edible oil in the domestic market and bring down prices.

According to a notification of the Directorate General of Foreign Trade (DGFT), “import policy” of refined bleached deodorisedpalm oil, and refined bleached deodorised palmolein “is amended from restricted to free with immediate effect and for a period up to December 31, 2021”.

It, however, added that the import is not permitted through any port in Kerala. Under the restricted category, an importer has to obtain a licence or permission from DGFT for inbound shipments. The government had also cut basic customs duty on crude palm oil to 10 per cent on Tuesday.

Refined bleached deodorised palm oil is made from refining crude palm oil. India, the world’s largest importer of vegetable oils, buys nearly 15 million tonnes of raw oil annually. Of this, palm oil comprises 9 million tonne and the rest 6 million tonneis soybean and sunflower oil. Indonesia and Malaysia are the two countries which supply palm oil.

Domestic edible oil prices have more than doubled in the past year. India meets about two-thirds of its edible oil demand through imports. As per data by industry body Solvent Extractors Association (SEA), India’s import of palm oils rose by 48 per cent to over 7.69 lakh tonnes in May 2021, on higher shipments of crude palm oil. India, the world’s leading vegetable oil buyer, had imported 4,00,506 tonne palm oil in May 2020.

The country’s total vegetable oil imports rose 68 per cent to Rs 12.49 lakh tonne in May 2021, compared to 7.43 lakh tonne in the year-ago period. The share of palm oil is more than 60 per cent in the country’s total vegetable oil imports.

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