India's crude edible oil duty cut may hit Malaysia planters
CIMB Securities
This story was originally published at 20:41 IST on 4 June 2025
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MUMBAI – The Indian government's decision to cut import tax on crude edible oils is likely to negatively impact Malaysian planters who have exposure to palm oil refining operations in Indonesia, CIMB Securities Sdn Bhd said. Government cut import duty on crude edible oils including crude palm oil, crude soybean oil, and crude sunflower oil on May 31. The effective tax rate now stands at 16.5% against 27.5% earlier. Meanwhile, refined edible oils continue to attract a 35.75% duty.
According to CIMB Securities, the wider duty differential between crude and refined edible oils poses a challenge to Malaysian palm oil refiners, as it erodes their competitiveness versus Indian refiners. "It may also intensify competition for feedstock." A lower duty on crude edible oils would increase its domestic demand from refiners to produce refined edible oils, hence reducing imports of refined oil and reducing inflation.
However, while Indian consumers could benefit from lower edible oil prices, CIMB Securities noted this policy could put downward pressure on local edible oil and oilseed prices, negatively impacting Indian farmers.
The move, aimed at easing food inflation and bolstering domestic refinery utilisation rates, could alter global edible oil trade dynamics, especially between India, Indonesia, and Malaysia, CIMB Securities said.
CIMB Securities was established in 1972 and is a subsidiary of KAF Seagroatt & Campbell Bhd, the oldest stockbroking financial institution headquartered in Malaysia. The company is into brokerage and investment services. End
Reported by Anjali Lavania
Edited by Nishant Maher
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