India, the No. 1 importer of vegetable oils, lowered its palm oil import tax from 15% to 10% to reduce the high cost of domestic cooking oil.
The tax cut is expected to make palm oil imports more attractive for Indian refiners than rival soybean oil and sunflower oil, whose duties remain unchanged. An expected increase in Malaysian palm oil production, as Gro forecast in a recent analysis, and a cut in Indonesia’s palm oil export tax, should further add to palm oil’s price competitiveness.
India’s move follows efforts by other countries, including Turkey, Russia, and Ukraine, to protect local food prices and vegetable oil supplies via import incentives or export controls.
Vegetable oils have emerged as a key driver of global food inflation this year, owing to overall tightness in supplies and a rebound in demand. Vegetable oil prices also have risen in tandem with crude oil, as some edible oils are made into biofuels.
Gro has created a series of real-time food inflation indices for major countries, including the US, China, India, Brazil, Canada, and Turkey. Join Gro on July 15 or July 20 for our webinar “What is Driving Global Food Inflation?” where we will discuss the scenarios that led to the current high-price environment for a range of commodities and the Gro analytics and forecast models you can use to predict how long it will last.
India’s new tax rate for palm oil imports will remain in place from June 30 until the end of September 2021. Palm oil dominates the global vegetable oil market with a 60%-70% share of trade worldwide.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.