Edible oil and flour maker Adani Wilmar could raise prices of cooking oil by at least 20% in the current quarter following the government’s move to impose higher import duties on refined oils.
On 14 September India raised the basic import tax on crude and refined edible oils.
Basic customs duty on crude soybean oil, crude palm oil, and crude sunflower oil was hiked to 20% from 0%, resulting in an effective duty rate of 27.5% on crude oils. Basic customs duty refers to a tax on imported goods to protect domestic industries by making imports more expensive.
Similarly, the basic custom duty on refined palm oil, refined sunflower oil, and refined soybean oil has been raised to 32.5% from 12.5%, with an effective duty rate of 35.75% on refined oils.
Adani Wilmar sells edible oils such as soya, sunflower, mustard, rice bran, groundnut and cottonseed. The company also sells basmati rice and wheat flour among other kitchen staples.
22% hike likely?
“By all means, if edible prices internationally remain steady, a 22% hike will be there,” Angshu Mallick, MD & CEO, Adani Wilmar Ltd said during an interview.
On Thursday, the company announced its earnings for the September quarter. The edible oil segment revenue grew by 21% year-on-year to ₹10,977 crore, with an underlying volume growth of 17% year-on-year.
The demand for edible oil in the September quarter was “stable”, the company said. The company has been working on expanding the distribution of its products in tier two and tier three markets.