The Hindu Business Line : Concern over rising crude olein imports

AFTER dipping to an average of 20,000 tonnes a month during August-October 2003, import of crude palmolein into the country has started to show signs of expansion.

In November, the inflow of this particular variety of oil recorded 27,430 tonnes and in December imports were much higher at 43,500 tonnes, as per arrival data compiled by Solvent Extractors' Association of India. Highest import of crude palmolein was in May last year at 2.71 lakh tonnes.

A decline during August-October was the result of special stipulation relating to carotenoid value announced by the Union Ministry of Finance on August 1 following complaints that what was described as crude olein was nothing but a degraded version of refined palmolein with an admixture of palm fatty acid distillate to meet the Indian import specifications and enjoy a lower rate of customs duty.

Importers have been lobbying the Government since August last — unsuccessfully so far — for a revision in the carotenoid value on the ground that the value fixed was unrealistic and cannot be met under normal circumstances.

Questions are now being asked as to how huge volumes still continue to get imported into the country and the role of customs authorities in granting clearance if the importers themselves admit their inability to meet the specified standard.

Most of the consignments are cleared at 65 per cent customs duty. For off-specification parcels, the rate of duty is 70 per cent.

Attempts to ascertain the exact nature of tests conducted by the customs authorities have been in vain, said an expert close to the import trade.

Kakinada and Chennai ports account for more than 50 per cent of crude palmolein imports. In trade circles, there are whispers of malpractice in the clearance procedure.

An oil technologist this correspondent spoke to pointed out that when even crude palm oil might not be able to satisfy the carotenoid limit of 500 ppm stipulated by the Government, there was no way crude palmolein would meet the specified value.

Interestingly, importers are rather unwilling to discuss the issue.

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