India unexpectedly cuts import duties on refined soybean, sunflower oils

The Centre, in a late night development, lowered the import duty on refined soybean oil and refined sunflower oil to check food inflation.

The import duty on refined soybean oil has been brought down 17.5 per cent to 12.5 per cent, while that on refined sunflower oil has been brought down in a similar proportion.

However, traders said that the step is more to do with sentiments rather than having any tangible impact on the ground because India seldom imports refined soybean and sunflower oil. 

Most of these oils (soybean and sunflower oil) are imported in their crude form and refined in India. Also, the exporting destinations don't have their own big refining capacities. 
The duty differential between the crude and refined oils for soybean and sunflower oil even after Wednesday's reduction remains fairly large to deter any big such imports, traders said.

The import duties on crude soybean oil, sunflower oil and palm oil are around 5.50 per cent.
Nonetheless, the move to lower duties is in total contrast with the mood prevailing in the market which was expecting a duty hike as both domestic and international edible oil prices have crashed in the last few months.

Traders said the decision to cut down duties against the expectations of an increase shows that Centre is hugely concerned with food inflation going into a big election year and also there are genuine worries over the fate of 2023 southwest monsoon in a El Nino year.