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New Delhi, Feb 28 (PTI) Edible oil industry body SEA Thursday expressed concern over a sharp rise in imports of refined palm oil to 2.75 lakh tonne this month from 1.3 lakh tonne in December, saying domestic processing units will be forced to shut if the Centre does not expand duty difference between refined and crude cooking oils.
In a letter to Finance Minister Arun Jaitley, the Solvent Extractors’ Association of India (SEA) sought creation of duty difference of 10 per cent between CPO (crude palm oil) and RBD palmolien (refined palm oil) as was prevailing before January 1, 2019.
“The import of RBD Palmolein (finished product) is doubled in just two months, thanks to reduction of duty difference from 10 per cent to 5 per cent for Malaysia. As anticipated, our worst fears have come true and nation is flooded with RBD palmolein from Malaysia,” SEA said in a statement.The reduction of duty difference between CPO and RBD palmolein to 5 per cent sourced from Malaysia has resulted in RBD palmolein imports more than doubled to almost 2,75,000 tonne in February 2019 from 1,30,000 tonne in December 2018.
“Yesterday, we have sent SOS representation to the Union government for their immediate attention to correct aberration. If not done immediately, our domestic palm oil refiners would be ruining in no time,” SEA said.
In the letter, the association argued that without a duty difference of minimum 10 per cent domestic refineries would be elbowed out of business, resulting in huge loss of employment and increase in non-performing assets.
“We, therefore, once again request you to provide 10 per cent duty difference, reduce the basic custom duty on CPO to 35 per cent to maintain the differential with refined palmolein at 10 per cent.
“This will ensure survival of the Indian edible oil refining industry, thus avoiding future serious dependence on imports of refined oils from origin countries,” it said.
From January 1 this year, the government has reduced customs duty on crude palm oil imported from Malaysia to 40 per cent from 44 per cent, while that on refined palmolein to 45 per cent from 54 per cent. As a result, the duty difference between crude palm oil and refined palmolein has come down to 5 per cent from 10 per cent.
India imports around 14-15 million tonne of edible oil annually, worth about Rs 70,000 crore, to meet domestic demand. PTI MJH
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