Sunflower oil from Nepal has found its way to as far as Erode in Tamil Nadu, resulting in the Solvent Extractors’ Association of India (SEA) expressing concern over the emerging trend.

SEA, which has been raising concern over massive imports of soyabean oil from the Himalayan kingdom of late and the impact on the vegetable oil refining industry in the eastern and northern parts of the country, has taken up the issue after one of its members, TN Edible Oils Pvt Ltd, wrote to it. The member has been operating a 200-tonnes-a-day sunflower oil refinery for the past three decades in Chennai.

B.V. Mehta, Executive Director of SEA, said edible oil imports from Nepal that are now penetrating the south Indian markets are hurting the refining industry further.

Sunflower and soyabean oils are imported into India duty-free, taking advantage of the SAARC Asia Free Trade Agreement (SAFTA). However, the rules of origin stipulate that a minimum 20 per cent value addition has to be done to a product if it is not grown or produced there.

The Indian edible oil industry contends that the 20 per cent value-addition is not being done in Nepal, which argues that the value-addition norms are being met.

In view of this, SEA has now mooted that all soyabean imports are channelised through a public sector firm.

Quoting Aanandh Kumar Kedia of TN Edible Oils Pvt Ltd, the letter said traders were purchasing finished goods from Nepal and just replacing the stickers. They were selling the oil under their own brand at "absurdly" low prices.

Referring to a call he received from a Bihar-based trader, Kedia said the trader was willing to supply loose oil in tankers at prices which are at least ₹8,000 a tonne lower than the prevailing wholesale market rate in Chennai. “They are confidently offering us oil in all types of packing, be it pouches or tins and even in loose,” he said in the letter to SEA.

Erode has become a big hub for Nepalese refined sunflower oil in Tamil Nadu, and Chennai is becoming one too, he alleged, adding: “It is not possible for us to compete with them at such prices and will eventually lead to closure of small and medium size refiners in the area.”

Stating that such trade practices will have a really long-term and negative impact on refiners in India, he said this is against the Government’s ‘Make In India’ policy.

“Of late we have been facing highly unfair competition from Nepal origin sunflower oil in our market,” he said in the letter.