(Sept 24): India, the top edible-oil buyer, halved import taxes on crude palm and soybean oils to ease local prices heading into the festive season.

Duties on the two products were reduced to 5% from 10%, while a tax on unrefined sunflower oil was scrapped, the Finance Ministry said in a note late Wednesday. Levies on refined edible oils were also lowered.

Consumers in the world’s most populous nation are vulnerable to swings in global vegetable-oil prices as India imports about 60% of its domestic needs. Disruptions linked to the Black Sea conflict and rising biofuel demand have tightened markets and lifted prices across the complex to a four-year high. 

“The immediate priority is to ensure adequate availability across the country during the upcoming festival months,” said Sudhakar Desai, president of the Indian Vegetable Oil Producers’ Association. The revised duty structure may make sunflower oil more competitive, Desai said.

India’s festive season gets underway from September, culminating in Diwali — the Hindu festival of light — in November. The period sees higher food consumption, with sugar and cooking-oil demand peaking as people eat more traditional sweets, fried food and other treats.

Benchmark palm oil prices rose as much as 0.9% in Kuala Lumpur following the duty announcement, snapping a four-day drop. Still, further gains may be muted amid bigger-than-expected supply in major grower Malaysia, according to Anilkumar Bagani, head of research at Mumbai-based Sunvin Group.

Palm oil prices “are unlikely to rise despite the duty cut as production is outperforming expectations and stocks are building beyond market estimates”, Bagani said.

Also, Indian importers had delayed unloading cargoes while waiting for the duty reduction, with increased discharges now expected over the next two weeks set to add to ample stockpiles and curb fresh overseas purchases, Bagani said.

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