Edible oil companies shares trade weak as government scraps import duty on soybean, sunflower oil - know what expert says

Most edible oil companies’ shares slipped around 5 per cent on the BSE intraday as the government on Tuesday evening announced an import duty cut on soyabean and sunflower oils to curb inflation. 

Individually, Gokul Agro, Modi Naturals, Ajanta Soya and Ruchi Soya shares slipped 5 per cent each on the BSE intraday, while Manorama Industries shares slipped 2.5 per cent intraday, however, they were trading flat with a positive bias at around 12:13 PM. 

On the contrary, Rakesh Jhunjhunwala-backed Agro Tech Foods shares were also trading flat since open on Tuesday, however, jumped over 1 per cent at around 12:14 PM.  

The government on Tuesday scrapped customs duty and agriculture infrastructure development cess on the import of crude soyabean oil and crude sunflower oil for 20 lakh metric tonnes each per year to ease local prices. 

The duty-free import of 20 lakh MT per year will be applicable for two fiscals, 2022-23 and 2023-24, for crude soyabean oil and crude sunflower oil, according to a notification by the Finance Ministry.  

In April, Indonesia banned exports of palm (edible) oil amid a severe shortage in the country. It typically supplies nearly half of India's total palm oil imports, according to a Reuters report. 

The government, last week to control spiralling prices, had cut excise duty on petrol and diesel and also waived import duty on some raw materials used in the steel and plastic industry. Besides, export duty was hiked on iron ore and iron pellets. 

Solvent extractors of India (SEA) Executive Director B V Mehta said that the prices of soyabean oil are expected to come down by Rs 3 per litre, according to a PTI report. He added, that the country is likely to import 35 lakh tonnes of crude soyabean oil and about 16-18 lakh tonnes of crude sunflower oil this fiscal.