Grain & Oil VAT Will Drop to 11%, Oil & Oilseed Import Costs Will Decrease

By CnAgri2017-05-02 10:38:44 Print

In order to continuously reduce the operational costs of the real economy, 13% VAT will be canceled starting from July 1st, and 17%, 11% and 6% VAT will remain, the main taxes of the markets are expected to be reduced by 380 billion throughout the year. As a result, the VAT of grain and oil will drop to 11%.

As for the estimated current import costs, after the implementation of the new tax rate, the theoretical costs of imported soybeans and rapeseed will drop by 60 RMB/ton, the import costs of rapeseed oil and soybean oil will drop by 120 - 150 RMB/ton, palm oil import costs will reduce by 90 RMB/ton. Soybean import costs itself can save around RMB 2.5 billion.

The oversupply of international soybeans is very serious this year and the falling space in price is large in the future. After the reduction of tax rates, the cost of imports may fall below 3,000 RMB/ton, then domestic oil and oilseed prices will keep falling.