Commodities

Vegetable oil producers seeks slab system of import duty for edible oils

Our Bureau Mangaluru | Updated on November 04, 2020

Sudhakar Desai, President of IVPA

To be in line with changes in global prices

The Indian Vegetable oil Producers’ Association (IVPA) has recommended to the Government to implement a slab system of import duty for edible oils that changes with the global prices.

The recommendation was made at a recent virtual meeting of its representatives with Sudhanshu Pandey, Secretary, Department Food and Public Distribution.

In a presentation to the Ministry, Sudhakar Desai, President of IVPA, said the prevailing duty structure is always adhoc and creates a constant dilemma of balance between farmers and consumers.

The benefit of high oilseed prices does not percolate to the farmers beyond the short harvest and marketing season. India being the biggest buyer of edible oils in the world markets, the free flow of supply chain is very crucial. It is necessary to remove the uncertainties surrounding the duty policy, he said.

Consumers are paying a price which consists of 41.25 per cent as import duty. Every global price hike is having an impact on the additional burden of 41.25 per cent on consumer price table in India.

He said the suggested solution lies in the flexibility and transparency of import duty structure based on prevailing market rates in a fixed slab structure. This would have a built-in price discovery mechanism, and this will be a good move towards streamlining the domestic and import supply chain.

He said the slab system of duty structure, if adopted, will take care of all the concerned — farmers, consumers, government revenue and industry — in a holistic manner.

India imports around 15 million tonnes of edible oil each year. This includes around 9 million tonnes of palm oil from Indonesia and Malaysia; approximately 2.5-3 million tonnes each of soybean oil from Argentina and Brazil, and sunflower oil from Ukraine and Russia, respectively, IVPA said in the presentation to the Ministry.

MFN duty

IVPA also asked the Government to make MFN (most favoured nation) custom duty rate the same as the ASEAN / IMCECA (India-Malaysia Comprehensive Economic Cooperation Agreement) preferential duty rates for ease of doing business. It said no imports happen under MFN rates. MFN duties were lower than ASEAN / IMCECA preferential duties during 2010-2018, it said.

PDS imports

Terming import quotas or restrictions on cheaper PDS (public distribution system) imports as unnecessary, the IVPA said such moves distort the free market operations. “Indian industry can supply to the PDS under the tender system as there is huge capacity available in India,” the IVPA statement said.

Published on November 04, 2020

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