Shares of Patanjali Foods surged 2.8% after New Delhi slashed the basic customs duty on crude sunflower oil to zero, setting the stage for a rally in the edible‑oil refining space.
The duty cut is part of a broader effort that trimmed crude palm and soyoil duties to 5% and refined duties to 27.5% and 22.5% respectively, bringing overall import duty on crude sunflower down to 5.5% from 16.5%.
Traders anticipate that the lower landed cost will lift demand for imported crude oils, a sentiment reflected in the anticipated uptick for Malaysian palm oil and US soyoil futures.
Patanjali Foods warned that 90% of its sunflower imports are currently stuck due to the West Asia crisis and that freight and insurance costs have spiked, factors that could temper the benefit of the duty cut.
The company said the duty reduction could ease pressure on its refining margins, but the extent of the upside will hinge on its sourcing mix, inventory levels, and pricing power in the domestic market.
Analysts view the policy change as a catalyst for a sustained rally in refining stocks, though they caution that the pace of import resumption will be the key determinant of short‑term performance.