Flagging serious concerns over reduction in the customs duty on imported edible oils under bilateral trade agreements between India and ASEAN, the Soybean Processors Association of India (SOPA) has requested the government to reconsider the decision in the interest of the trade and farmers.
“A reduction in duty on palm oil in December will have a negative effect on soy oil prices which will, in turn, impact the prices of soybean. We are currently into full soy crushing season and soybean prices which are already below MSP may go down further, directly affecting soybean farmers across India,” Davish Jain, SOPA Chairman, said in a letter to Commerce Minister Suresh Prabhu on Wednesday.
The edible oil market is price sensitive and reduction in price of any oil has an effect on other edible oils. As per the Indo-ASEAN Free Trade Agreement and the Comprehensive Economic Cooperation Agreement between Malaysia and India, the customs duty on crude palm oil imported from Malaysia and Indonesia will have to be cut by 4 percentage points from 40 per cent. Similarly the duty on refined palm oil and palmolein will have to be reduced by 9 percentage points to 45 per cent effective December 31, 2018.
“Our dependence on edible oil imports, as seen from the burgeoning foreign exchange outflow on this commodity, must be reduced and this is possible only by encouraging Indian oilseed farmers. Ensuring a remunerative price for their produce is the only way to induce the farmers to grow more oilseeds,” said Jain. He requested the Centre to consider retaining the duties on palm oil, both crude and refined at the current level.