Up Import Duty On Refined Palmolein to 16.5%: SEAI to Govt.

Complaining against Indonesia's move to raise the export duty on crude palm oil (CPO) to 16.5%, Indian vegetable oil manufacturers and traders today sought similar import duty on refined Palmolein (RBD).

"Government of India should increase import duty on RBD to 16.5% from the present 7.73%, with tariff value to be increased from USD 484 per million tonne to current market prices of USD 1,150 per million tonne," said Solvent Extractor Association of India (SEAI).

Last week, Indonesia hiked export duty on CPO by 1.5% to 16.5%, which will hit Indian importers, and lowered duty on RBD from 15% to 8%.

With the differential duty of 16.5% on crude palm oil and 2% on the packed refined oil, it will be impossible for the Indian industry to compete with their counterparts in Indonesia, SEAI said.

The new duty structure will make RBD palmolein from Indonesia cheaper by USD 152 per million than the RBD produced in India from processing of the imported CPO.

"They will keep prices cheaper only by USD 10 to 20 per million tonnes, enough to kill the Indian refinery industry," said Pradeep Chowdhry, Managing Director, Gemini Edibles & Fats India Private Ltd.

"The Indian edible oil industry is under threat of closure due to the new export duty structure adopted by the Indonesian government on various palm oil," SEAI President Sushil Goenka told reporters here.

India is the main importer of CPO from Indonesia. Against 10 million tonnes of exports of CPO from Indonesia, India imports 6 million tonnes.

"The change in duty structure by Indonesia will hurt Indian refineries the most," Goenka added.

SEAI officials disagreed that raising import duty on RBD palm oil will add to inflation. "There will be no impact on this count as most of the export duty benefit will be retained by the Indonesian refineries since refining capacity is still lower than CPO production," they added.

"Once India levies higher import duty on RBD palmolein, status quo will be maintained and prices of CPO will have to be maintained as earlier by Indonesian exports since they will need to export CPO," the SEAI president added.

Goenka, flanked by Atul Chaturvedi, CEO Adani Wilmar and Chowdhry, said they met Food Minister K V Thomas on the issue who reacted positively. "We will meet Finance Minister Pranab Mukherjee soon on the issue," Goenka said.

In his 2011 budget speech, Mukherjee had announced additional Rs 300 crore for promoting cultivation of vegetable oil.

Source : moneycontrol.com