The government on Tuesday reduced basic customs duty on crude palm oil by 10 per cent, which will help bring down the edible oil prices in the retail market. While no decision has been made, the tax reduction could lower local prices and boost consumption, giving support to Malaysian palm oil, along with soya and sunflower oil prices, and dampening prices of local oilseeds such as rapeseed, soybean and groundnut.
The government will make a final decision to cut the taxes sometime this month, said an official at the Ministry of Consumer Affairs also involved in the process who asked to remain unidentified. Domestic soya oil and palm oil prices have more than doubled in the past year, hitting consumers already stung by record fuel prices and reduced incomes amid the Covid-19 pandemic.
Give relief to people, the Government has reduced customs duty on crude palm oil from 35.75 per cent to 30.25 per cent and refined palm oil from 49.5 percent to 41.25 per cent. This will bring down the retail prices of edible oils in the market, the CBIC tweeted.
The country’s total vegetable oil imports rose by 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 of the country’s total vegetable oil imports. Earlier this month, the government had reduced the tariff value for the import of edible oil, including palm oil, by up to USD 112 per tonne, a move which experts had said would help lower domestic prices. Tax experts had said that the reduction in tariff value could result in softening of edible oil prices in the domestic markets as customs duty payable on-base import price would also come down.