Soyabean processors for higher duty on oil imports

As prospects brighten for a good soyabean harvest this year, aided by normal monsoon, the oilseed processors have asked the Centre to curb the inflow of cheap oils into the country to protect both the growers and processing industry in the months ahead.

The Soyabean Oil Processors Association (SOPA) in a letter to the Prime Minister has urged the government to increase the customs duty on crude soyabean oil from 12.5 per cent to 37.5 per cent and on refined oils from 20 per cent to 45 per cent, to check the cheap imports and protect the domestic industry.

“Soyabean is in the pod formation stage and the crop prospects are definitely better than last year,” Davish Jain, Chairman, SOPA, told BusinessLine . “We just need some sunshine and a couple of showers over the next few weeks to get a good harvest that will start in September,” he added.

Soyabean has been planted on 111.83 lakh hectares (lh) this year, marginally higher than the previous year’s 110.71 lh.

Despite the traditional and largest producing State Madhya Pradesh reporting an 8 per cent drop in acreage, the total area under the oilseed has been largely maintained as farmers have taken up the planting in new areas such as Gujarat, while the area has increased in States such as Maharashtra, Telangana and Karnataka.

The soyabean processing industry has been going through a tough time for the past three years and many units have closed down as cheaper imports have made the domestic industry unviable. As the surging imports continue to weigh on the beleaguered domestic processing processors, SOPA has stepped up its demand for a higher duty on cheaper oil imports, petitioning the highest decision making authority in the country, the Prime Minister.

“The burgeoning imports of soyabean oil, which has increased several fold from 10.55 lakh tonnes per annum (average of 2011-13) to 40 lakh tonnes (likely in 2016) is also detrimental to the interest of oilseed cultivation in the country and will take us toward being totally dependent on imported oil as production of our oilseeds may further go down,” Jain said in a letter to the PM.

Large scale imports of cheaper oils over the years has also impacted the country’s soyameal exports.

The surging oil import at a low duty rate has pushed up the prices of Indian soyameal making it uncompetitive in the world market.

Over the last four years, the Indian soyameal exports have sharply reduced from a high of ₹14,155 crore in 2012-13 to around ₹1,511 crore during 2015-16.

At a time when the domestic oilseed processors are in great distress, a handful of large importers and refiners have been demanding a duty cut on crude oil.

“When the very survival of the indigenous crushing industry is at stake, any reduction in duty will only mean more sickness, moving away of farmers from soyabean cultivation and further increase in our dependence on imports. If the foreign suppliers were to take advantage of the situation and increase edible oil prices, the story of pulses may get repeated in edible oils also,” Jain said.

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