| Date: |
22-12-2015 |
| Subject: |
SEA raises concerns over international policy impact on domestic edible oil industry |
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KOLKATA: The edible oil industry has raised concern about international policies that may affect India's domestic oil sector. In a release issued by the Solvent Extractors' Association of India (SEA) on Monday the industry has pointed out how policy changes in Argentina, Indonesia and Malaysia can leave an impact on edible oil prices.
The newly elected president of Argentina Mr Mauricio Macri has eliminated most of the farm export taxes including on soybean and soybean oil. These measures will have a positive impact on their export and its impact is seen in the fall in prices of soybean and soybean oil in the international market, SEA said.
Likewise in the Indonesian government has decided to implement its biodiesel blending mandates to blend 15% biodiesel into gasoil or B-15 for its domestic transport and industrial sector. Indonesian government plans to raise its biodiesel blending mandated to B-20 in 2016 to support the entire Indonesian palm industry. Indonesian government aims of the recently created subsidy from the fund was to encourage domestic production and use of palm oil-based biodiesel to soak up excess crude palm oil (CPO) stocks in the country which will eventually create enough demand and raise palm oil prices. During the recent GAPKI Conference at Bali, it was announced that in 2016, Indonesian government plans to produce about 3.0 million tonnes of biodiesel by providing subsidy of US$300 per tonne of biodiesel produce so as to reduce the availability of CPO thereby intend to strengthen the price of CPO in the international market. The crude oil prices are falling in the international market as such Indonesia is unlikely to achieve the big target announced by their ministry.
Indonesia and Malaysia, the major palm oil producing countries have set up a Council with a common objective to maintain higher price of palm products in the international market and reduce competition amongst them.
India imported nearly 9.5 million tonnes of palm products from Indonesia & Malaysia during 2014-15, nearly two-third of India's total imports of 14.4 million tonnes. India is heavily dependent on Indonesia & Malaysia for edible oil requirement and spending over Rs.65,000 crores (approx. US$ 10 bn) per annum. Indonesia & Malaysia has inverted duty structure in place for exports of CPO and RBD Palmolein with high duty on CPO (raw material) and lesser duty on RBD Palmolein (finished product) which has already affected the domestic refining sector, In view of this new development, Indian refiners and India may be at a further disadvantage due to their combined selling power. This may have serious implication for India in the long run and to offset its impact to minimal; suitable policy changes be initiated by the government, SEA said in the release.
Source : economictimes.indiatimes.com
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