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SEA urges government to hike duty difference between crude & refined palm oil to 15%

24 Nov 2023 Evaluate

In order to protect domestic refiners and curb imports of refined cooking oil, edible oil industry body -- The Solvent Extractors’ Association of India (SEA) has urged government to increase the duty difference between crude and refined palm oil to 15% from 7.5%. It pointed out that Indian vegetable oil (comprising of edible and non-edible oil) refining industry is ‘facing challenges’. 

The Indian edible oil Industry, with a size of Rs 3 lakh crore, holds significant importance. Over the last 12 years, Indonesia and Malaysia have imposed higher export taxes on Crude Palm Oil (CPO) compared to refined Oil to protect their refining industry. This has made refined oil cheaper, rendering Indian capacity redundant and unutilized. The low duty difference of 7.5 per cent is a boon for Indonesian and Malaysia refiners. 

India’s imports of vegetable oils reached an all-time high of 167.1 lakh tonnes during the recently concluded 2022-23 oil year (November-October), with edible oil shipments hitting a record high of 164.7 lakh tonnes. The palm oil segment accounted for almost 60 per cent of imports. The landed prices of RBD palm olein are lower than CPO due to exporting countries imposing higher export tax-cess on raw materials.

SEA also expressed concern over the ban on exports of deoiled ricebran. The ban negatively affects solvent extraction, without serving its intended purpose of reducing dairy costs as deoiled ricebran price has least impact on milk and dairy prices. 

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