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Soybean and palm oil are the most commonly used edible oils in the country's market. However, sunflower and canola oil can be better alternatives. The prices of these two products in the world market are close to soybean and palm. The import of these two products has been discouraged by imposing high tariffs.
Highlighting these points, after reducing customs duties on soybean and palm oil, the Bangladesh Trade and Tariff Commission (BTTC) has now recommended reducing customs duties on importing sunflower and canola oil as well. This recommendation is made to import two types of sunflower and canola oil - refined and unrefined. BTTC made this recommendation in a report on the redetermination of customs duties on these two edible oils. The report was sent to the Ministry of Commerce and the National Board of Revenue (NBR) last Wednesday (November 27, 2024). A copy of which has also been given to the office of Finance Advisor Salehuddin Ahmed.
BTTC Chairman Mainul Khan said, "We have analyzed and found that reducing the import duty on sunflower and canola oil will increase the import of both products and improve the supply system of edible oil."
The NBR had been imposing a high duty on sunflower and canola oil for so long considering their luxury products. In the current context, BTTC believes that this consideration is not relevant. The organization said that eliminating the difference in import duty on soybean and palm oil will expand the source countries of edible oil imports while diversifying consumer choices. The BTTC report said that the global soybean and palm oil market is on the rise. Therefore, the supply of sunflower and canola oil can be increased as an alternative.
Currently, there is a duty of 31 percent on crude sunflower and 32 percent on refined sunflower. Currently, there is a duty of 37 percent on crude canola oil and 58.60 percent on refined canola. Recently, the NBR has reduced the VAT on crude soybean and palm oil from 15 percent to 5 percent.
The BTTC said that a 5 percent VAT can be imposed on the import of crude sunflower and canola oil given the month of Ramadan. This facility can be given till December 31, 2025. However, the duty of refined sunflower and canola oil has been proposed at 20 percent, including 15 percent VAT and 5 percent Advance Income Tax (AIT).
In its report, the BTTC mentioned that crude sunflower was not imported into the country in the fiscal year 2022-23. However, in the 2023-24 fiscal year, 7,985 tons were imported, from which the NBR received a revenue of Tk 174.2 million. In the 2022-23 fiscal year, 2,607 tons of refined sunflower were imported, revenue was Tk 14 million, and in the 2023-24 fiscal year, 5,093 tons of sunflower oil were imported, NBR received a revenue of Tk 171.9 million.
In addition, crude canola oil was not imported into the country at any time in the 2022-23 and 2023-24 fiscal years. However, in the 2022-23 fiscal year, 58.67 tons of refined canola oil were imported, from which a revenue of Tk 5.2 million was collected. And in the 2023-24 fiscal year, about 9 tons of this oil were imported, from which the NBR received a revenue of Tk 9 million.
'Canola oil' is the most popular among health-conscious people in the country. Currently, it is the third highest-produced vegetable oil in the world. Canola oil was first produced in Canada in 1974. The top producing countries of this oil are China, Canada, India, and Japan. This oil is recognized as safe by the US Food and Drug Administration.
58 percent of the world's sunflower oil is produced in Russia and Ukraine. Sunflower oil consumers in Bangladesh are mainly middle and upper-middle-income people. Sunflower oil is imported and marketed in the country by several companies including Fair Food and Lifestyle, Bangladesh Edible Oil, ACI Edible Oils, Square Food and Beverage, and Pran Agro Limited.
The report mentioned that the price of palm oil per ton on November 25 was US$1,160, crude soybeans $1,049, crude canola $1,120, and crude sunflower $1,165.
When contacted, NBR Chairman Abdur Rahman Khan said, "We are reviewing the BTTC report. A decision will be taken on this matter later.
Source: Online/GFMM
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