Agri Business

‘Make abroad, sell in India’ killing domestic refining: SEA

Our Bureau Ahmedabad | Updated on January 22, 2019 Published on January 22, 2019

Reiterates demand to reconsider duty difference between CPO-RBD palmolein

Miffed over the reduction in the duty difference between crude palm oil (CPO) and palmolein, the oil processing industry has pinned its hopes on the upcoming budget to make a favourable case for the refining industry.

Terming the move as ‘Make Abroad, Sell in India’, the Solvent Extractors’ Association of India (SEA) has noted that the decision has the potential of sounding the death knell of the domestic industry as large quantities of refined palm oil gets imported with a reduced duty difference.

“The notification issued on December 31, has reduced the duty difference between CPO and Palmolein from 10 per cent to 5 per cent on palmolein to be imported from Malaysia. However, this concession is not available to palmolein coming from Indonesia or any other ASEAN nation. This will result in a piquant position as the same oil will attract different duties from different origins. The duty reduction has reduced the effective duty difference between CPO & RBO Palmolein to just 5 per cent against the previous 10 per cent ,” Atul Chaturvedi, President, SEA said in a letter to the industry.

The second blow came as an abnormal reduction in tariff value on crude palm oil and Refined, Bleached and Deodorised (RBD) palmolein. “The current revision of tariff value on January 15, 2019 on crude palm oil and RBD palmolein is out of sync and needs to be immediately corrected to be in the line with market price. ...needless to mention, due to reduction in duty difference between CPO and RBD palmolein to 5 per cent , the industry is already facing serious threat of closure and with lower tariff value difference, the refiners will be in great trouble to operate... leading to shortage of edible oil supply,” he stated.

He also highlighted the need to strengthen the oilseed development in the country. “With customs revenue from oil imports now touching a whopping ₹30,000 crore annually, it would be suitable to divert part of this money to the Oilseed Development Fund. We are seriously following up on this with the Union Government and hoping to have some favourable news in the forthcoming budget,” he added.

SEA also raised a fresh demand for permitting exports of rapeseed oil or mustard oil in bulk without any restrictions of pack size.

In the edible oil complex, it is only the rapeseed oil/mustard oil that is subjected to the condition of maximum pack size of 5 kg for exports. All the other vegetable oils are permitted to be freely exported irrespective of pack size.

It adversely affects the farm price of rapeseed/mustard seed, reducing the earnings of farmers. Further, the Agri Export Policy 2018 aims to remove earlier export restrictions on all agri products.

Published on January 22, 2019
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