HYDERABAD: A US decision to hike import duties on soya oil-based biodiesel from major producing economies like Indonesia and Argentina could see Indian soya oil processors and refiners gaining from cheaper imports in the coming quarters.
The US government recently increased import duties from 50.29 per cent to 64.77 per cent for biodiesel from Argentina.
The import tax on biodiesel from Indonesia was raised to 68.28 per cent from 41.06 per cent to help domestic refining and crushing industry.
As both Argentina and Indonesia exported a bulk of their produce to the US, Indian industry representatives and analysts expect the development to lead to excess availability of soya oil in global markets, pulling down prices.
This comes close on the heels of Indian edible oil refiners expecting better margins after India increased import duties on refined oils, to boost domestic firms sourcing oil seeds locally and improve capacity utilisations.
The move is also expected to help Indian edible oil firms improve the share of soya oil in their edible oil imports by nearly 10 per cent, say analysts.
While palm oil has the highest share in Indian edible oil imports, soya oil is the second largest with a share of around 25 per cent.
Faiyaz Hudani, deputy vicepresident, research, Kotak Commodity Services, said Indian imports of soya oil may increase by 5-10 per cent going by the subsidies and tax benefits that Argentina and Indonesian governments offer to their exporters.
It may also help the Indian domestic refiners to increase their capacity utilisations.
“Branded refineries, who are into direct retailing to end consumers, will benefit from this as they will be able to lower prices and also see slight improvement in margins due to cheaper imports,“ said Dr Davish Jain, chairman, Soyabean Processors Association of India.
Source: economictimes.indiatimes.com