Record vanaspati imports from Nepal at 1 lakh tonne in 2000-01

Our Commodities Bureau

New Delhi, April 26 : VANASPATI imports from Nepal in 2000-01 touched an all time high of 1 lakh tonne, because of the country’s tariff and raw material based advantages as compared to Indian manufacturers.

“There is at least a 19.04 per cent increase in vanaspati imports from Nepal in 2000-01 compared to the previous fiscal because of the exemption from both, import duty on CPO (crude palm oil) and the use of 25 per cent indigenous oils in that country,” Indian Vanaspati Producers Association (IVPA) executive director IR Mehra said.

Based on the figures collected from the border checkposts of Raxaul, Jogbani and Panidanki, Nepalese vanaspati imports to India have crossed 1 lakh tonne in the fiscal just ended, up from 84,028.62 tonne in 1999-2000, added Vanaspati Manufacturers Association’s executive secretary, S Gurumoorthi.

Both Mr Gurumoorthi and Mr Mehra were disappointed over government’s decision to continue with a 75 per cent import duty on CPO, the most important raw material for vanaspati manufacturers, though they welcomed the decision to remove the distinction between sick and non-sick vanaspati units.

Based on the average international price of CPO at $230 per tonne and the rupee-dollar exchange rate, it cost vanaspati manufacturers about Rs 11,300 per tonne and at the rate of 75 per cent, Rs 8,470 had to be paid as duty.

Due to exemption from this duty in Nepal and no compulsory requirement for the use of 25 per cent indigenous oils in vanaspati manufacture, the cost advantage of their produce was over Rs 10,000 per tonne, they added.

Mr Mehra and Mr Gurumoorthi said cost of vanaspati manufactured in India was around Rs 480 per 15 kg but excessive inflow of the product from Nepal had brought the market price to Rs 360 per 15 kg tin, making the Indian products non-competitive.

“A Rs 120 per 15 kg tin disadvantage has brought the domestic industry to a standstill,” Mr Gurumoorthi said.
“This is reflected in the fall of CPO imports in the previous month,” Mr Mehra added.

They said under the Indo-Nepal friendly trade regime, vanaspati manufacturers were required to pay only a 3.5 per cent export tax and this helped increase their exports to India to 1 lakh tonne from zero in 1996-97.

While earlier Nepalese vanaspati was available only in north-east, West Bengal and Bihar, now it had made massive inroads into UP and MP.

This was because of the vacuum created by domestic manufacturers, who preferred not to produce than suffer huge cash losses on account of market price being lower than the production cost, they said.

After the Budget announcement of hike in import duty on CPO to 75 per cent from 25 per cent, it had been projected that there would be a corresponding hike in vanaspati prices and the consumer would be the sufferer.

But this had not happened due to the Nepal factor and the domestic manufacturers were the real victims, they added.

Both felt that unless the government revised the CPO duty and brought it to at least 55 per cent, the vanaspati units had little chance of survival. (PTI)