The duty on crude palm oil has been lowered to 27.5% from 37.5%, the finance ministry said in a notification. The reduction is effective from today.

Palm oil purchases by India, which imports more than two-thirds of its edible oil needs, climbed to a three-month high last month. The lower tax is expected to further boost inbound shipments and support benchmark prices of the commodity, used in everything from cooking oil to shampoo.

Palm oil futures in Malaysia have surged about 66% since the year’s low in May amid strong demand from India and China. The duty move is expected to help Indonesia and Malaysia, the world’s biggest growers.

Exports of the commodity from Malaysia slumped almost 19% from a month earlier to 1.15 million tonnes from Nov 1 to 25, according to cargo surveyor AmSpec Agri.

Lower duties, however, may impact domestic farmers, who are sowing winter crops at present, said BV Mehta, executive director of the Solvent Extractors’ Association of India.

“The government has taken the decision from the consumer’s angle. It would have been better if they had cut duties of other oils also,” he said.

India’s monsoon-sown oilseeds output is seen rising 15% from a year earlier to 25.73 million tonnes in 2020-21, according to the farm ministry. Production of soybeans is expected to rise to 13.58 million tonnes from 11.22 million tonnes, it added.