Telangana wants basic Customs duty on crude palm oil reimposed

The Telangana Government has asked the Union Government to reimpose the basic customs duty on crude palm oil to stabilise domestic prices and make them remunerative for oil palm farmers in the country and ensure a price of ₹18,000 to infuse confidence among the farmers.

Currently, the basic customs duty on crude palm oil, crude soyabean oil and crude sunflower oil is zero. However, after taking into account the 5 per cent agri cess and 10 per cent social welfare cess, the effective duty on crude varieties of these three edible oils is 5.5 per cent.

Telangana, a leader in oil palm plantations in the country with two lakh acres, has announced an ambitious plan to increase the acreage to over eight lakh hectares (lha) over the next five years.

Permits for 14 firms

The Telangana government, which announced an oil palm mission covering 31 out of the 33 districts in the State, gave permissions to 14 companies to set up processing centres and refineries. “We have set up 42 nurseries to meet the demand and promote cultivation,” Telangana Agriculture Minister Tummala Nageswara Rao said.

The oil palm area in the State went up to 80,000 hectares in 2023-24 from zero in 1992-93 when it started promoting the plantation, he said in a letter to the Centre.

The National Mission on Edible Oils-Oil Palm said about 9 million tonnes(mt) of palm oil was being imported every year costing the exchequer  ₹40,000 crore. Pegging the potential area at 28 lha, it said the country was growing the plantation crop only in 3.70 lha with Andhra Pradesh and Telangana being the major players.

Weaning paddy farmers

It set a target to add 6.50 lha by 2025-26, taking the total area to 10 lha. This includes an addition of 3.28 lha in the North-East.

In the first phase of the Oil Palm Mission, the Telangana Government set a target of plantation in 4 lha in the next three years. It roped in top edible oil companies to work with the farmers.

The State has decided to wean away a chunk of farmers from paddy to oil palm. The paddy area has gone up significantly in the last few years as irrigation facilities improved following the inauguration of Kaleshwaram project. 

Stating that the the Centre had lifted the duties on crude palm oil, the Minister said it was time the duties are reimposed and ensure farmers get a price of  ₹18,000 a tonne of FFB. “This is important to reinstil confidence among farmers and align themselves with the mission objectives,” the Telangana Agriculture Minister said.

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