Centre may soon allow export of branded mustard, groundnut oil

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SummaryIn line with the policy of allowing export of high-value agricultural produce, the government is likely to allow export of branded mustard and groundnut oil.

In line with the policy of allowing export of high-value agricultural produce, the government is likely to allow export of branded mustard and groundnut oil. This is expected to boost farm realisations for oilseeds farmers.

This is for the first time in the last five years that edible oil will be allowed to be exported. India currently imports close to half of its requirements. The Cabinet Committee on Economic Affairs (CCEA) is likely to take a call on the commerce ministry’s proposal shortly.

Last year, India allowed exports of coconut oil from Kerala and Tamil Nadu for boosting farm realisations. India imported a record 10.19 million tonne of vegetable oils in 2011-12.

Sources told FE that the move is being considered because of a surge in import of palm and soyabean oil from Indonesia, Malaysia and Argentina. While the landed price of palm and soyabean oil is estimated at R50 and R70 a litre, respectively, the wholesale price of groundnut and mustard oil is currently R80 and R90 a litre, respectively.

The export of edible oil was initially banned in March 2008 for a period of one year. Subsequently, the restriction was extended each year. However, the government exempted the export of edible oil in branded consumer packs, with a ceiling of 20,000 tonne for a period of one year till September 2013.

The CCEA had recently approved the enhancement of import duty on crude edible oils from zero to 2.5%, while retaining the present import duty of 7.5% on all refined edible oils. The agriculture ministry had proposed to increase the duty on crude edible oil to protect the interest of palm growers, particularly from Andhra Pradesh.

Last week, CCEA had approved the Department of Commerce's proposal of allowing export of 14 categories of processed and value-added agricultural products, even in the event of a restriction on export of basic farm produce. The product categories for which export restrictions have been removed include wheat of meslin flour, cereal flours other than of wheat or meslin (maize, oats etc), cereal groats, meal pellets, milk products (including casein & casein products), butter and other fats derivatives from milk, dairy spread and dried onions.

The country’s agricultural and processed foods’ exports (including basmati rice, fresh fruit and dairy and meat products, among others) are expected to cross R1 lakh crore in the current fiscal against R82,480 crore in 2011-12.

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