The Solvent Extractors Association of India (SEA) has urged the Government to impose 10 per cent import duty on crude palm oil and 20 per cent on RBD palmolein. The move will help farmers who are experiencing sharp fall in prices of fresh palm fruit bunches and soyabean.
Besides helping farmers, the Government can generate revenue of Rs 4,000-5,000 crore, said Vijay Data, President, SEA, in a letter addressed to Finance Minister P. Chidambaram, Agriculture Minister Sharad Pawar, Consumer Affairs minister K.V. Thomas and Commerce Minister Anand Sharma.
Most of the RBD palmolein is consumed by hotels, canteens, restaurants and the food industries. While a small quantity of palmolein is consumed by lower income group, they are protected by subsidy of Rs 15/kg.
The decrease in CPO and RBD palmolein prices in the international market has severely affected soyabean price in the domestic market. Soyabean prices have fallen to Rs 3,200 a quintal from Rs 4,800 in July when farmers had undertaken sowing operations. Prices may drop further with arrivals peaking. The fall in prices will also have an impact on current rabi sowing of rapeseed/mustard.
There are reports that farmers have uprooted oil palm trees in Tamil Nadu after the steep fall in CPO prices in the international markets, said Data.
Malaysia and Indonesia have huge palm oil stock of over five million tonnes. In order to get rid of this excess stock, these palm oil producing countries are pushing their exports into India.
The average CIF (cost, insurance and freight) price of CPO has dipped to $770 a tonne from $1,184 in April last year. Similarly, RBD palmolein has fallen to $840 a tonne from $1,205 in April. In last six months, RBD palmolein and CPO prices have fallen by 33 per cent to over $400.
In India, RBD palmolein prices have fallen to Rs 51,800 a tonne from Rs 62,131 in July.
The Government should also consider de-freezing the tariff value on RBD palm oil and other oils to align with current market price as being done for RBD palmolein on fortnightly basis to check the undue advantage, said SEA.