Industry expects govt to impose duty on imported edible oils

Industry expects govt to impose duty on imported edible oils
PTI
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First Published: Tue, Jun 16 2009. 03 46 PM IST
New Delhi: The edible oil industry expects the government will levy “some” duty on imported oils in the forthcoming Budget to send positive signals to farmers amid the Kharif sowing season.
“We expect that the government will impose some duty on crude edible oils as it is free of electoral compulsion,” Solvent Extractors Association executive director B.V. Mehta said.
He said imposition of duty in the Budget would send a positive message to the farmers who have just started sowing the oilseeds.
The acreage of soyabean and groundnut, two major oilseeds grown in Kharif season, is lower than last the corresponding period last year, according to the initial government report.
Besides, the government could not forego a revenue of about Rs7,000 crore, which was coming when customs duty was there on crude edible oils, he added.
Mehta also said domestic prices of edible oils are currently lower than a year-ago period.
The Centre in April last year had abolished customs duty on crude palm oil and crude soyabean oil from a level of 40-45%. However, a 20% duty on crude soya oil was imposed later on for about four months.
The duty on refined vegetable oils was also brought down to 7.5% from over 50%.
The vanaspati industry, on the other hand, opposes any duty on imported edible oils as crude palm oil is the major ingredient for making hydrogenated vegetable oil.
At present, refined soyabean oil is available at about Rs50-54 a litre while RBD palmolein costs less than Rs50 a litre, thanks to the zero import duty. Vanaspati is selling at Rs46-48 a kg.
The edible oil prices were as high as Rs80 a litre in March 2008.
Industry observers said that the imports may drop significantly if the government imposes any duty on edible oils in the Budget.
If the Centres continues with the present duty structure, the domestic prices may fall as importers have huge stocks accumulated in last seven months in the hope of selling at a higher rate once duty is imposed, they added.
The import of vegetable oils by India, the second largest buyer in the world after China, has surged to 50.43 lakh tonnes during November-May 2008-09 oil year against 29.73 lakh tonnes in the year-ago period.
The total import of vegetable oils was a record 63 lakh tonnes during 2007-08 season (November to October).
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First Published: Tue, Jun 16 2009. 03 46 PM IST