SEA wants Center to ban import of refined palm oil to save local businesses – World Affairs SRS

SEA wants Center to ban import of refined palm oil to save local businesses

– World Affairs SRS

Stating that reducing the import duty differential between refined and crude palm oil has the potential to hit the domestic refining industry, industry body SEA on Thursday called for re-curbing imports of refined palm oil from the Center and a cap of 11 per cent. Demanded restoration of the earlier tariff difference. between two oils.

In December 2021, the government reduced import duty on RBD palmolein and RBD palm oil by 5.5 per cent to check the prices of edible oils in the domestic market.

With this reduction, the import duty gap between refined palm oil and crude palm oil (CPO) has come down to 5.5 per cent.

Generally India, a major importer of edible oils, largely buys CPO from the global market and refines it in the domestic market. But due to narrowing of duty difference between the two oils, traders are turning to refined palm oil.

In a letter to Union Food Secretary Sudhanshu Pandey, Mumbai-based Solvent Extractors Association of India (SEA) President Atul Chaturvedi said: “We strongly appeal to the government to restore the duty differential of 11 per cent between crude and refined palm oil. As it was. Reduction in agriculture cess on CPO by 5 per cent as prevailing before December 20, 2021. This will ensure a gap of 11 per cent in import duty between CPO and refined palm oils.

They also demanded that the government reinstate the import of RBD palmolein and refined palm oil under the banned list with immediate effect or at least from April 1, 2022.

“This will provide an equal opportunity to the domestic refining industry and will be in line with our Prime Minister’s vision of Make in India,” he said.

Chaturvedi said the difference in duty between CPO (raw material) and refined palm oil (finished product, which was earlier 11 per cent and has now been reduced to 5.5 per cent) has the potential to destroy the CPO refining industry in the country.

In addition, buyers are turning to refined palm oil as exporting countries such as Indonesia and Malaysia impose higher taxes on CPO shipments than refined palm oil.

Chaturvedi also said, “We fear that CPO imports in our country will now be replaced by refined palmolein and our palm refining industry will be left with ‘packers’ seriously compromising on the huge investments made in the industry.”

This situation needs to be rectified before investments turn sour and add to the non-performing assets (NPAs) of the lenders, he said, adding that the current reduction in duty differentials is a big deal not only for the domestic palm oil refining industry but also for oilseed farmers. It’s a blow. as well.

After a long time, domestic oilseeds have started selling above the minimum support price (MSP) and farm incomes have improved. He said the move would be counterproductive and contrary to the stated objective of increasing domestic oilseeds production.

In January 2020, the government had placed RBD palmolein on the ‘restricted list’ of import items. However, it was later removed from the list to boost domestic supply and check retail prices. Now, its import has been allowed till December 2022.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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