| Date: |
22-08-2015 |
| Subject: |
Solvent extractors’ association calls for increase in import duty on edible oils |
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NEW DELHI: The significant increase in import of edible oils is hurting domestic farmers and vegetable oil refiners, Solvent Extractors' Association of India (SEA) has said and asked for an increase in import duty.
The Centre should immediately increase the import duty on crude vegetable oils from 7.5 per cent to 25 per cent and on refined vegetable oils from 15 per cent to 45 per cent, said SEA president Pravin Lunkad, so that farmers get remunerative price for their produce in the ensuing kharif harvesting season.
Imports increased 26 per cent in the first nine months to July in the ongoing season to 10 million tonnes from 8 million tonnes last year, and are expected to touch 14 million tonnes for the entire year, compared to 11.8 million tonnes. The value of the entire season's imports is valued at $10 billion or about Rs 65,000 crore.
"In 2000-01, a similar situation was prevailing during the tenure of (Atal Bihari) Vajpayee government. The government took immediate action to safeguard the interest of vegetable oil industry and farmers and raised the import duty from 15 per cent to 75 per cent in the span of eight months. We need similar corrective steps to safeguard the interest of farmers, crushers and refiners," said Lunkad.
The situation has further worsened in the past six months, he said.
According to the industry, India is being used as a dumping ground for excessive supply of edible oils in the world market. Cheap imports have put tremendous pressure on the local prices, which are at a historical low since 2008 and have touched a level where farmers growing oilseeds are in distress. Besides, with India's dependence on imports growing to about 70 per cent, the country's food security is also under threat. The area under edible oilseeds has declined in the past five years, except in 2013-14.
The vegetable oil industry has been suffering for the past three years also due to the nominal duty difference of 7.5 per cent between crude and refined oil and inverted export duty structure by Indonesia and Malaysia. Their higher export duty on crude palm oil and lower duty on RBD palmolein has given added advantage to refined palm oil exports from these countries. The recent zero export duty on palm products has given them further opportunity to offload their burgeoning stock in India, depressing the local prices of oilseeds. Capacity utilisation of domestic vegetable oil refining industry has reduced to 45-50 per cent against 65-70 per cent in the past and solvent extraction capacity reduced to less than 30 per cent.
The import of 1.5 million tonnes of vegetable oil in July is the highest figure for any single month allowed under open general licence since 1994. The stock of edible oils as on August 1 at ports and in pipelines increased to 2.42 million tonnes from 2.18 million tonnes due to higher import during July. India's monthly requirement is about 1.6 million tonnes.
The monsoon deficit for the country as a whole has increased to 10 per cent and the forecast for the next two months is not encouraging. The deficit, as per India Meteorological Department is likely to be 12 per cent by the end of the season. This is likely to increase the country's dependence on imports in the next year as well, Lunkad said. As a result, domestic farmers stand on suffer on account of both low productivity and low price for their produce.
Source : economictimes.indiatimes.com
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