Chennai, Oct. 26 A record 85 lakh tonnes (lt) of vegetable oils are estimated to have been imported during the current oil season ending this month. A feature of this is rising shipments of RBD (refined, bleached and deodourised) palmolein.
“Import of RBD palmolein is rising very fast as the effective import duty is low. The main reason for the rise in imports is low international price, coupled with nominal import duty,” said Mr Ashok Sethia, President of the Solvent Extractors Association of India.
Meagre imports
Till September during the current season, 11.52 lt of RBD palmolein were imported – a record.
“RBD palmolein imports until a few years ago were hardly one lakh tonnes. But in the recent past there has been a flood of imports,” said Dr B.V. Mehta, Executive Director of the association.
2 reasons
Two reasons are being attributed to the rise in RBD palmolein imports. One is that the industry is buying more palmolein for blending with other oils such as groundnut oil. “In fact, some manufacturers are indulging in unethical blending,” said industry sources.
The second reason is imports by Government agencies such as State Trading Corporation. These agencies are buying RBD palmolein for the Centre so that the cooking oil can be distributed through ration shops.
Vegetable oil imports in general and RBD palmolein imports in particular have been soaring since April 1 last year when the Centre allowed duty-free import of crude vegetable oils, while cutting Customs duty on refined oils to 7.5 per cent.
The Customs duty was cut to control inflation and negate the rising edibel oil prices in the global and domestic markets. Since then, vegetable oil prices in the global oil have dropped but the Centre has kept the low duty rates intact.
“The effective duty on import of RBD palmolein is 5 per cent only,” said Mr Mehta.
Customs duty on vegetable oils is levied on a base import price fixed by the Government.
For example, the base import price or tariff value of RBD palmolein is $484 a tonne. This was fixed in December 2006 and has remain unchanged in view of higher global prices for edible oils.
Currently, RBD palmolein in the spot market for delivery in November and December is quoted at $705 a tonne.
RBD palmolein primarily comes from Malaysia and the palm group of oils, including crude palm oil, make up about 85 per cent of vegetable oil imports.
Stocks uncrushed
“The domestic crushing industry has been hurt by these large-scale imports. In fact, a large quantity of rapeseed/mustard is still not crushed from last year’s crop and the carry-foward stocks will be over 20 lt,” said Mr Sethia.
Dr Mehta said: “We are not able to utilise our capacity to the optimum due to these imports. About 30-40 per cent of the capacity is lying idle.”
Source : Business Line