Economy

SEA alleges 'Make abroad-Sell in India' approach to kill domestic refining sector

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

(file photo)   -  Reuters

Reiterates demand to reconsider duty difference between CPO-RBD palmolein

Miffed over the reduction in the duty difference between the crude palm oil 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 a potential of sounding the death knell of the domestic industry as large quantities of refined palm oil gets imported with reduced duty difference.

"The notification issued on December 31, has reduced the duty difference between CPO and Palmolein from 10% to 5% 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% against previous 10%," Atul Chaturvedi, President, SEA said in a letter to the industry.

The second blow came was reduction in tariff value on crude palm oil and 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. It is needless to mention, due to reduction in duty difference between CPO and RBD Palmolein to 5%, the industry is already facing serious threat of closure and with lower tariff value difference, the refiners will be in great trouble to operate their refinery and may be forced to close down, leading to shortage of edible oil supply," Chaturvedi stated.

He also highlighted the need to strengthen the oilseed development in the country. "With customs revenue from oil imports now touching Rs 30,000 crore annually, it would be suitable to divert part of this money to Oilseed Development Fund. We are seriously following up on this with the Union Government and hopping 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 5 kgs 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 and thus decreases the earning potential of rapeseed/mustard seed farmers. Further, the Agri Export Policy 2018 aims to remove all the earlier export restrictions on all the agri products.

"In view of all the above, we have requested Ministry of Commerce to issue Notification in this regard. It will greatly benefit the farmers, who would be harvesting the crop in the next two months," Chaturvedi said.

Published on January 22, 2019
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