Agri Business

Edible oils demand hit by surging prices: SEA chief

Our Bureau Mangaluru | Updated on September 24, 2021

Imports likely to be 13.4 million tonnes this year, HoReCa offtake picking up

Inspite of the slow increase in the demand from HoReCa (hotels, restaurants and catering) for edible oils, the Solvent Extractors’ Association (SEA) of India is of the view that the import of vegetable oils will be below 15 million tonnes (mt) for the second consecutive year during the current oil year 2020-21 (November-October).

Addressing the members of SEA of India at its 50th annual general meeting (AGM) in Goa on Thursday, Atul Chaturvedi, President of SEA of India, said the import of edible oils may be closer to 13.4 mt during the oil year 2020-21 against 13.17 mt in the previous year. He said this has been largely due to subdued demand caused by higher prices and Covid-related demand destruction.

“Earlier we used to have almost one mt of imports growing year after year. In the last two years, I have seen that the demand and the imports have plateaued at around 13.2 mt or 13.4 mt,” he said.

Slow consumption rise

Later on speaking at the SEA Awards function, Chaturvedi said: “Much was spoken during the last year about the demand destruction. Now the demand from the HoReCa segment is slowly increasing and out-of-home consumption has stabilised albeit at a slightly lower level.”

He said the country’s imports are likely to fall below 15 mt for the second consecutive year due to unprecedented high prices of vegetable oils in the international market.

Addressing the members at AGM, Chaturvedi said the oilseed planting the current year is reported at about 19.3 million hectares (as on September 9) against about 19.6 million hectares during the same period last year. This means there will be more or less same level of planting of oilseeds this year as well, he said.

On the oilmeals export, he said the exports were around 3.7 mt valued at about ₹8,900 crore during the financial year 2020-21 against 2.43 mt valued at ₹4,500 crore in the previous year.

Free trade pacts

On the government’s plans to renegotiate free trade agreements (FTA) and bilateral trade agreements, he said that it is important for the Indian vegetable oil industry to actively participate in the process to safeguard legitimate interests of the industry and correct the anomalies that have inadvertently crept into the earlier agreements.

On the vegetable oil imports front, the SEA said there is a cap on import duty that can be levied by the importing country. In the same way, the trade agreements should have similar restrictions and regulations on the export duty and levies to have a level-playing field.

Stating that there is no provision for ‘Bilateral Safeguard Duty’ in the earlier ASEAN agreement, he said it is, therefore, necessary to have the provision of ‘Bilateral Safeguard Duty’ in the revised agreement so that as and when excessive imports take place harming the domestic industry, automatically additional duty can be imposed without going through the cumbersome process of filing papers for ‘Safeguard Duty’.

Zero duty import

Chaturvedi said the Government had notified the Customs (Administration of Rules of Origin under Trade Agreements) Rules 2020 called ‘Carotar 2020’ on September 21 2020 to enable the Customs to verify the adherence of ‘Rules of Origin’ for claiming preferential rate of duty. Still countries such as Nepal and Bangladesh are flouting the ‘Rules of Origin’ with impunity, he said, adding exports from these neighbouring countries are flooding Indian markets at zero duty and threatening the very survival of our industry. “We urge our central government to enforce ‘Carotar 2020’ to safeguard the interests of our domestic industry and also ensure loss of revenue to the exchequer is avoided,” he said.

The Government introduced the Scheme for Remission of Duties and Taxes on Export Products with effect from January 1 2021 after the discontinuation of the MEIS (Merchandise Exports from India Scheme). He said the rates notified for exports of most of the oilmeals are only half a per cent of the FOB export price. “This is way below what we received under MEIS and does not fulfil the objective of refunding all the taxes incurred in exports. We urge the Central government to offer us realistic RoDEPT rates for all the export commodities under the oilseeds, vegetable oils, oilmeals and their derivatives,” he said.

Published on September 23, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like