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Our Bureau

Revenue officials may work out proposal for tomorrow's meet

New Delhi April 10 If the electoral reverses for the Congress in Punjab and Uttaranchal prompted a ban on wheat futures, the latest setback in Delhi's municipal polls seems to have turned the Centre's attention now to edible oils.

The Cabinet Secretary, Mr B.K. Chaturvedi, on Tuesday, convened a meeting of senior officials, including the Chief Economic Advisor, Dr Ashok Lahiri and the secretaries of the Departments of Revenue, Consumer Affairs, Food and Public Distribution to discuss the unfolding edible oil scenario in view of spiralling international prices.

According to sources, the meeting discussed a menu of options for a further restructuring of the import duty structure.

"A detailed presentation was made and various tariff proposals, including their revenue implications, were examined. No conclusive numbers emerged, though the Revenue officials may eventually work out a proposal that can be put before the Union Cabinet on Thursday," they said.

Budget proposals

In the 2007-08 Budget, the Union Finance Minister, Mr P. Chidambaram, has abolished the four per cent special additional duty on edible oil imports. As a result, the effective duty on crude palm oil (CPO) came down from 67.6 to 61.8 per cent, while falling from 50.8 to 45 per cent for crude de-gummed soya oil. Further, the basic duty on sunflower oil was reduced by 15 per cent, with the effective duty on crude sun oil declining from 72.9 to 51.5 per cent.

However, these measures have not helped much in view of the hardening of global prices caused mainly by diversion of palm oil towards bio-diesel production. Currently, the landed price (cost plus freight, Mumbai) of CPO is ruling at $675 per tonne (up around $75 a tonne since the presentation of the Budget), while being $710 a tonne for de-gummed soya oil (up $40 a tonne).

Options

Among the options being considered for putting up before the Cabinet include a reduction in the basic duty for CPO and de-gummed soya oil. While there is a 7.5 per cent duty difference now between CPO (60 per cent) and refined palm oil and palmolein (67.5 per cent), there is no such gap between de-gummed and refined soya oil (both are 45 per cent).

The basic duty on de-gummed soya oil may well be cut to 37.5 per cent, in order to keep a 7.5 per cent difference vis-à-vis refined oil as suggested by the Lahiri Committee for restructuring of edible oil tariffs.

The sources said the reduction of duties might be accompanied by an upward revision of tariff values to reflect international price levels. The tariff values, on which the duties are levied, have been frozen for all edible oils since last July.

More Stories on : Economy | Oilseeds & Edible Oil | Exports & Imports | Excise and Customs

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