SEA urges govt to impose import duty on CPO, RBD palmolein

05 Dec 2012 Evaluate

A move, which will help farmers who are experiencing sharp fall in prices of fresh palm fruit bunches and soyabean, the Solvent Extractors Association of India (SEA) has urged the government to impose 10% import duty on crude palm oil and 20% on RBD palmolein. Besides protecting the interest of soyabean and mustard seed growers, the government can also create revenue of Rs 4,000-5,000 crore.

Most of the RBD palmolein is consumed by hotels, canteens, restaurants and the food industries and a small quantity of palmolein is consumed by lower income group, they are protected by subsidy of Rs 15/kg. The decrease in crude palm oil (CPO) and RBD palmolein prices in the international market has mainly affected soyabean price in the domestic market. Soyabean prices have dropped to Rs 3,200 a quintal from Rs 4,800 in July when farmers had undertaken sowing operations. The decrease in prices will also have an impact on current Rabi sowing of rapeseed/mustard.

Malaysia and Indonesia have huge palm oil stock of over 5 million tonnes, to reduce their excess stock; these palm oil producing countries are pushing their exports into India. The average CIF (cost, insurance and freight) price of CPO has plunged to $770 a tonne from $1,184 in April previous year. RBD palmolein has dropped to $840 a tonne from $1,205 in April. In last 6 months, RBD palmolein and CPO prices have declined by 33% to over $400. In India, RBD palmolein prices have reduced to Rs 51,800 a tonne from Rs 62,131 in July.

SEA has expressed its concerns that the government should consider de-freezing the tariff value on RBD palm oil and other oils to align with current market price as being done for RBD palmolein on fortnightly basis to check the undue advantage. India, the world's largest edible oil importer, has zero import tariff on crude oil and 7.5% on refined oil.