Due to increase in import duty on palm oil, edible oils and soaps etc. are likely to become expensive.

18-Sep-2024 06:10 PM

Mumbai. Like soybean oil and sunflower oil, the Central Government has also increased the import duty on crude palm oil by 20 percent, due to which its rate has increased from 5.5 percent to 27.5 percent.

As a result, not only the price of palm oil and other edible oils may increase, but the price of soaps and cosmetics in the manufacture of which palm oil is used may also become expensive.

Along with crude edible oils, import duty on refined edible oils has also been increased by 20 percent.

According to industry analysts, big companies involved in the manufacture and business of soaps, personal care products and snacks etc.

can increase the price of their branded products by 1.6 to 2.5 percent, only then their dividend will be safe, otherwise their margin will decrease.

With the aim of curbing the import of edible oils and increasing the income of indigenous oilseed producers,

the government last week announced a 20-20 percent increase in import duty on crude and refined edible oils. The import duty on refined edible oils has now increased to 37.5 percent.

This duty hike will directly affect the manufacturers of soaps and personal care products that use a derivative of crude palm oil.

Apart from this, companies manufacturing biscuits and snacks etc. using refined palm oil and special category fats will also be affected by this duty hike and may also be forced to increase the prices of their products.

Palm oil is an important raw material for many FMCG companies, which is used extensively in the manufacture of soaps and cosmetics.

Although the government has asked the processors not to make any immediate increase in the maximum retail price of edible oils,

it remains to be seen to what extent this is followed. The price of mustard oil has already increased considerably.