Customs Charge Has Been Decreased on Crude Palm, Soya, and Sunflower Oil


The duty-free import of 20 lakh MT of crude soybean oil and crude sunflower oil will be applicable for two fiscal years, 2022-23 and 2023-24, according to an official announcement from the Ministry of Finance

The Indian government stated on Tuesday that imports of crude soybean oil and crude sunflower oil will be exempt from customs tax and farm infrastructure development cess for 20 lakh metric tonnes per year, easing demand and lowering domestic inflation. , in the last week itself government abolished the import duty on steel and iron products to reduce the cost and price of the domestic industry manufacturing sector which will control the inflation during this tough time when the whole world is trying to rehabilitate from the corona pandemic and the ongoing war between Russia and ukraine.

In October of last year, the government decreased the basic import taxes on edible oil in response to rising fuel prices. The import duty on crude palm oil was reduced from 10% to 2.5 percent, while the levy on crude soya and sunflower oils was reduced from 7.5 percent to 2.5 percent.

As per  the data available  of 2019 (in million metric tonnes ) India is the importing 20% of palm oil  from the different countries and comes on 1st position for importing it, on the 2nd position China (10.1 % )  ,Pakistan (6.4%) comes on 3rd position, on the 4 th position Netherland(5.5)  and on the last but not the least on 5th position italy (3.7%) these are the top 5 countries which is importing palm oil on large amounts.


The countries which are producing most of palm oil in million metric tonnes is

Indonesia( 58% ) , Malaysia( 26%) ,Thailand( 4% ), Colombia( 2%) , Nigeria (1%), Guatemala (0.85%) ,Honduras (0.58%), Papua New Guinea (0.55%).


 Why is there a need for a high amount of palm oil? And why are sunflower and soybean oil facing import problems in India ?


  • The first reason behind dealing with palm oil supply is the Russia and Ukraine war as both the countries together account for nearly 80% of the global trade in sunflower oil,as Ukraine is the world’s largest exporter of sunflower. Which is now quite similar to the trade share of Indonesia and Malaysia which accounts for 90% of palm oil whose demand increased gradually.
  • Due to the invasion of Russia on Ukraine since February 24 , the port has been closed and the exporters avoiding the shipping routes from Black Sea due to which the supply chain has been distributed – man-made and natural in other cooking oils especially sunflower and soybean oil .
  • Also a large amount of sanctions which is underlying on Russia have curtailed the trade of sunflower oil (12.17 Mt) which is the world’s third largest exported vegetable oil after soybean (12.39 MT )and palm (49.63 MT) oil ,according to the estimated of USDA 2021-2022 .
  • According to the report of USDA soybean

output falling by 9.4% for 2021-2022

due to the dry weather in South America including the soybean output of combined Brazil,Argentina, and Paragua which exported the world’s largest amount of soybean.

 The world’s largest edible oil is sunflower ,soybean and palm oil but the amount of decline of these oil for export due to the supply tightness of sunflower because war between Russia and Ukraine and soybean because of the  warm weather or drought create condition to adopt  or increasing demand of palm oil for regular use.

  • Recently in India the ethanol blending method is adopted by the Government for decreasing the amount of pollution and also by doing this need of imported material decline which helped in to save money.

In the same manner the Indonesian government made  30% bending of diesel with the palm oil mandatory as part of a plan to slash fossil fuel imports .Due to which there is less amount of available for both  export and domestic cooking oil  as they are focusing more on the biodiesel and Indonesia produces largest amount of palm oil all over the world.

     As India is the world’s largest vegetable oil importer , the largest amount importe is palm oil followed by soybean and sunflower it faces more problems because Indonesia has been India’s top supplier of palm oil though it was overtaken by Malaysia in 2021-2022 in the last 10 years  crude palm oil but for refined palm oil India is still importing more from Indonesia which is not much beneficial in future because in forming  total palm oil we need refined oil more.