Govt exempts customs duty on soybean, sunflower oil; AWL, Ruchi Soya dip 5%

The government on Tuesday exempted customs duty and the agri cess on importing 2 million tonnes of soybean and sunflower oil per year

Shares of Adani Wilmar (AWL) and Ruchi Soya Industries shed 5 per cent on the BSE in Wednesday's trade as investors booked profit in the counters after the government on Tuesday exempted customs duty and agri cess on importing 2 million tonnes of soybean and sunflower oil per year.

The duty-free import of 20 lakh MT per year will be applicable for two FYs (2022-23, 2023-24) for crude soyabean oil and crude sunflower oil, the Finance Ministry said in a notification.

The effective duty on crude palm oil, crude soybean, and sunflower till now was 5.50 per cent, which will come down to almost zero after Tuesday’s reduction for the two oils up to a fixed quantity, the Business Standard reported. CLICK HERE FOR MORE DETAILS

Individually, AWL was locked in the 5 per cent lower circuit band at Rs 664.95, while Ruchi Soya Industries, too, was down 5 per cent to Rs 1,045.45 on the BSE in the intra-day trade. In comparison, the S&P BSE Sensex was up 0.09 per cent at 54,100 level.

However, both these stocks have had a strong run-up in the past three months with Adani Wilmar zooming 82 per cent, and Ruchi Soya rallying 34 per cent, as compared to 3 per cent decline in the benchmark index.

AWL is a joint venture between the Adani and Wilmar group, and is India's leading manufacturer of edible oil under the Fortune brand. Besides oil, the company offers products like wheat flour, rice, pulses, sugar and packaged foods. Ruchi Soya is primarily engaged in manufacturing and selling of edible oil and soya products under brands, such as Mahakosh, Sunrich, and Nutrela.

Currently, AWL and Ruchi Soya are trading under the T group on the BSE and under BE category on the NSE. In the T2T and BE segment, each trade has to result in delivery and no intra-day netting of positions is allowed.