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. Last Updated: 07/27/2016

Vegetable Oil Tariffs May Be Slashed

Itar-TassA shopper checking prices of sunflower oil, which have risen dramatically because of supply shortages in recently.
The government plans to slash an import tariff on soy oil, sunflower oil and rapeseed oil to 5 percent from 15 percent for six months as part of its campaign aimed at fighting inflation, the Economic Development and Trade Ministry said Monday.

"The ministry has sent a proposal to the government to cut the tariff," a ministry spokeswoman said. She added that the ministry had also proposed cutting an import tariff on vegetables to 5 percent from 15 percent for six months from January.

She said she expected the new vegetable oil tariff to become effective from the moment a draft resolution setting was signed by Prime Minister Viktor Zubkov. She could not say when this might happen.

Agricultural analysts SovEcon said Ukraine could benefit from the lower sunflower-oil tariff, while Latin American countries, including Brazil and Argentina, could benefit from most from the new soy oil tariff.

"Ukraine may be the first to boost sunflower oil exports to Russia. Russia may also increase soy oil imports, mainly from Latin America," SovEcon chief executive Andrei Sizov said.

SovEcon estimated that imports of unpacked sunflower oil in the 2006-2007 marketing year, from October to September, at 30,000 tons, bottled sunflower oil at 100,000 to 130,000 tons and soy oil at 20,000 to 25,000 tons.

Rising consumer prices, set to post a double-digit increase this year, have prompted the government to impose export tariffs on wheat and barley and start selling grain stocks to domestic flour mills. The government has also cut an import tariff on dairy products.

Government officials have also said an export tariff could be set on domestic sunflower oil. The spokeswoman said she had not heard about any steps taken to this end.