India lowers cooking oil tax to curb prices
WHAT HAPPENED
India reduced taxes for importing palm, soybean, and sunflower oil. The tax on crude sunflower oil dropped from 10% to 0%; other oils will also see reductions, in an attempt to lower their price in stores.
WHY IT MATTERS
Food inflation rose from 6.6% to 7.1% in August: something that cost 100 rupees now costs 107. Since India imports most of its oil, paying less tax can lower supermarket prices, but it pressures local seed producers.
AND FOR YOUR PORTFOLIO
For Indian families, cooking oil could cost less in the coming weeks and relieve some daily expenses. For local producers, cheaper foreign oil means greater competition and possibly less protection for their prices.
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“India seeks to lower supermarket prices by opening the door to cheaper imported oil, although this pressures its farmers.”