MUMBAI: The vegetable oil trade has asked the government to reimpose custom duty on edible oils in the budget to check the significant rise in imports. This will restrict a sharp fall in local oilseed prices and encourage farmers to expand area of the crop under kharif cultivation.
The Solvent Extractors Association of India (SEA) has requested for the imposition of 20% customs duty on imports of crude palm oil and sunflower oil, 30% on refined palm oil and 25% on crude soyabean oil. At present, there are no duties on import of crude oil, while refined oil imports attract a duty of 7.5%.
The association has further asked the government to realign the tariff value. Currently, the price of refined palm oil is $760 per tonne whereas the duty of 7.5% is collected on tariff value set at $484. Therefore the effective duty is only 3%. According to SEA, this leads to loss of revenue and encourages import of finished products.
According to SEA, India's edible oil imports are likely to rise by 34% in the current oil year (Nov’08-Oct’09) to 75 lakh tonnes from 56 lakh tonnes in the previous oil year. This import bill for edible oils is over Rs 20,000 crore per year. The association has thus asked the government to encourage farmers to increase oilseed production. SEA said that there is urgent need to diversify area from foodgrain to other alternative crops and oilseed.
Anil Agrawal, director, Sanwaria Agro Oil, that crushes and refines soyabean said that price of the commodity is down to Rs 2,450 per quintal from Rs 2,700 over the past three months due to heavy imports. "This will discourage farmers to plant oilseed and they might shift to other remunerative crops like paddy," he said.
Source : The Economic Times