SEA seeks import duty hike on crude palm oil, RBD Palmolein.

NEW DELHI: Concerned over cheap import of vegetable oil depressing local prices of oilseeds, industry body SEA has sought the government to hike import duty to 20 per cent on refined vegetable oil and 10 per cent on crude, to protect the interest of soyabean and mustard seed growers.

India, the world's largest edible oil importer, has zero import tariff on crude oil and 7.5 per cent on refined oil.

The country's total vegetable oil imports crossed a record 10 million tonnes in 2011-12 on account of lower global prices following huge surplus stocks in Malaysia and Indonesia.

"We request the government to initiate steps to safeguard interests of the farmers and the industry by imposing immediately a token 10 per cent import duty on crude palm oil (CPO) and 20 per cent on RBD Palmolein and RBD Palm oil," Solvent Extractors' Association of India (SEA) President Vijaya Data said in representation to the government.

The hike in import tariff would not impact majority of consumers or cause inflation because prices are at present are lower by nearly 15 per cent from the high witnessed six months back, he said, adding increase in duty would fetch government a revenue of Rs 4,000-5,000 crore.

According to SEA, import of vegetable oil at lower price has hit domestic oilseeds prices. For instance, soyabean prices have fallen sharply from Rs 4,800 that ruled during sowing period to Rs 3,300 per quintal at the time of harvesting now and farmers are worried about the price they might get for mustard seed, which is being sown currently.

Also, oil palm trees are also being uprooted due to lower realisation on Fresh Fruit Bunches of oil palm tree caused due to cheaper imported CPO, the Association said.

"This type of negative trend of high prices at the time of sowing and low prices at the time of harvesting will discourage the farmers and may make them to resolve, not to undertake oilseed cultivation in future, unless they are assured of remunerative prices for their produce," it said.

The oil palm cultivation programme, initiated by the government will suffer a major setback if the farmers lose interest in oil palm cultivation, it added.

As per industry data, average cost, insurance and freight (CIF) price of crude plam oil has come down by 33 per cent to Rs 1,184 per tonne, while refine palm to $840 a tonne in last six months.


Source : economictimes.indiatimes.com