Effective import duty reduction on CPO not enough: SEA

The Solvent Extractors’ Association of India (SEA) has said the reduction in effective import duty on CPO (crude palm oil) is not enough.

In a letter to the members of SEA on Tuesday, Atul Chaturvedi, President of SEA, said the Union Finance Ministry reduced the Agriculture Infrastructure and Development Cess on imports of CPO to 5 per cent from 7.5 per cent with effect from February 13 based on the pleas of SEA. This helped increase the duty differential between CPO and RBD oils to 8.25 per cent from earlier 5.5 per cent.

He said: “This could provide a minor relief to the beleaguered refining industry, but not enough. The association is pursuing for larger duty difference and for placing RBD oils under ‘negative list’.”

Minister urged

He said in the post-Budget meeting with Union Commerce and Food Minister Piyush Goyal, former SEA president OP Goenka had conveyed the dire financial situation of the domestic refining industry to the minister. He had urged for creating a duty differential of 11 per cent between CPO and refined palm oils, and sought to place RBD palmolein and RBD palm oil under “negative list’” to save the domestic industry from ruin.

Referring to a virtual meeting of SEA with Sudhanshu Pandey, Secretary of the Department of Food and Public Distribution, a few days ago, to discuss the current market prices of edible oils and the effect of recent duty reductions on the retail prices of edible oils, Chaturvedi said Pandey expressed displeasure of the Government. He had expressed his opinion that much more could be done to provide relief to the retail consumer by passing on the benefits of reduced duty to them.

Stressing the need to reflect the realistic MRP (maximum retail price) on the pouches of edible oils, Pandey had said the consumers in the middle and lower economic strata are compelled by the retail traders to pay the MSP mentioned despite the industry selling at a lower price.

Advantage to exporting countries

In the letter, Chaturvedi said it was expected by the authorities that reduction in import duty on RBD palmolein and on RBD palm oil would make available the finished product at a lower rate to the consumers.

“However in the last two months, the prices of refined palmolein in the country have rather gone up by more than 10 per cent with exporting countries taking advantage of the Indian situation. This clearly shows that encouraging finished goods import is not only detrimental to our local industry but does not help the consumer as well,” Chaturvedi said.

The estimated import of RBD palmolein was at 1.33 lakh tonnes (lt) in January against 4.19 lt of CPO. He said 25 per cent of palm products imported is palmolien. “We fear this percentage would go up dramatically in coming months if no remedial measures are not put in place. Needless to say this will seriously affect the health of our palm refining industry,” he said.

‘Weight only’

The Department of Consumer Affairs had recently issued a notice inviting public consultation for declaring the quantity edible oils and ‘vanaspati’ by ‘weight only’ when packed in consumer packs. Stating that SEA has categorically opposed such a move, he said the industry and the consumers are very conversant with the volumetric package since many years and a change to “weight only” measure will lead to market disruptions.

SEA has reiterated that an one litre liquid package at 30 degrees centigrade works out in the range of 910-913 gm per litre depending on the specific gravity of the oils. Likewise, semi-solids packed at 40 degrees centigrade would weigh 900-903 gm per litre, and ghee and “vanaspati” packed at 45 degrees centigrade would weigh 897-900 gm per litre.

Declaring these packaging temperature and weights per litre would eliminate the scope of misleading declaration to the consumers, he said.

Apart from this, Food Safety and Standards Authority of India (FSSAI) had issued draft notification recently specifying parameters for solvent extracted crude edible oils.

The Food Regulatory and Legal Committee of SEA, under the chairmanship of Prabodh Halde, had wider consultations with members of the committee, and the association has submitted suggestions to FSSAI for modifying and expanding the range of various parameters, in view of the advancement in technologies. This will enable the solvent extraction industry to function smoothly, he added.

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