The Hindu Business Line : Carotene specifications a major challenge for edible oil industry

THE country's vegetable oil industry, which has congregated here ahead of the annual convention to estimate kharif oilseeds crop, seems to be at the crossroads. Warm smiles are no more seen as many processing units are passing through a difficult phase.

A major challenge the edible oil refineries face relate to the beta-carotene specification imposed by the Government 15 months ago. Many importers are clearly not able to meet the new stipulation that was imposed to check misdeclaration of cargo quality to take advantage of lower duty.

Some industry representatives, who did not wish to be identified, expressed regret that for the misfeasance of some players, the entire industry is being penalised. In August 2003, the Government said imported crude palm oil and palmolein would be charged 65 per cent duty if only the carotene level was more than 500 parts per million (ppm).

Some industry insiders told Business Line that crude palm oil with over 500 ppm carotene content was available at a premium of about $20 a tonne; but the quantities were rather limited. "Because of limited availability of oil with the stiff specification, many importers are forced to resort to unethical measures," averred one in private.

It is widely believed that quality manipulation could be practised more easily in smaller ports. It is of course for the Government to take a call on how to address the genuine grievance of the vegetable oil industry.

According to a report circulating in the industry, following a meeting with the Union Minister for Food and Consumer Affairs recently, a communication has already been despatched to the Ministry of Finance to relax the carotene condition for crude palm oil (but not for crude palmolein).

A three-member delegation of scientists from Regional Research Laboratory, Thiruvananthapuram, has been authorised to visit Indonesia to study first hand and draw samples of oil for testing.

Another issue of concern is the excise duty exemption being enjoyed by refining units in Kutch and such other places.

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