Edible oil traders use free-trade pact to get around...
By Rajendra Jadhav and Emily Chow
MUMBAI/KUALA LUMPUR, Aug 3 (Reuters) - Edible oil traders are sourcing exports of palm oil and other cooking oils to India from neighbouring countries, designating the supplies as duty-free under a regional free-trade pact and circumventing India's import tax hike on the oils.
India, Bangladesh and Sri Lanka are among the signatories of the South Asian Free Trade Agreement (SAFTA) that created a free-trade zone in the South Asian region. The rising flow of duty-free edible oils is disrupting trade in India, the world's biggest importer of the oils, and is undermining efforts to raise local oilseed prices, the reason for imposing the taxes.
Two palm oil traders confirmed that they have sold palm olein from Bangladesh to India as a duty-free product under the SAFTA. Another Malaysia-based palm trader said shipments of palm-based speciality products like cocoa butter substitute and palm-based ghee from Bangladesh and Sri Lanka to India have increased.
"Earlier volumes were less but after the recent duty increase, volumes too have increased," the trader said. "It´s surprising to see now that bulk volumes are coming in," he said, referring to Indian imports from Sri Lanka and Bangladesh.
All three traders declined to be identified as they were not authorized to speak to the media.
India raised its import tax on refined palm oil in March to 54 percent to support local farmers. In June, taxes on crude and refined soyoil, sunflower oil and canola oil were ....