Mumbai, Jan 3: The Solvent Extractor's Association (SEA) has strongly opposed the food ministry's move to cut down the basic duty of five per cent on the extra one-lakh tonne consignment of palmolein to be imported for sale under the Public Distribution System (PDS).Moreover, it has also opposed the move for the five per cent duty-cut on imports of crude edible oil. The ministry's proposal to levy a reduced total duty of 10 per cent on crude edible oil imports has drawn flak from the solvent extractor's body.
According to Ajajy Tandon, president of the association, these suggestions, if accepted, would not only flood the market with cheap oils but would also hit the farmers and vegetable oil industry.
In fact, the country's edible oil imports have reached an all time high in the just-conluded year. Imports of edible oils during October-November 1998 has touched 6.5 lakh tonnes as against the previous year's 2.6 lakh tonnes.Further, about 3.0 lakh tonnes of edible oils have come during December, takingthe total to 9.5 lakh tonnes - a steep 300 per cent more - compared to 3.5 lakh tonnes imported during the same period last year. Tandon has voiced serious concern towards the unexpected high import during the peak crushing season. The prices of edible oils have fallen substantially last month and meal prices are already at rock bottom levels, placing the industry in an extremely difficult situation.
If the government decides to reduce the import duty at this juncture, it would be suicidal for the country as well as oilseed-growing farmers and the crushing industry, he added.
It is ironical that that government on one hand is supporting crops like wheat and paddy which are in excess production while on the other hand discouraging farmers from producing oilseeds. It is high time that the government re-evaluted its policies keeping in view the larger and long-term national interests, he said.
The managing committee of the association has recently reviewed the current situation and is of the opinion thatthe government should impose a 10 per cent additional regulatory import duty on imports of refined and five per cent on crude edible oils during the peak season ( November-May) to protect farmers and the domestic crushing industry. Thus the total duty effect on refined oil would be 25 per cent and for crude oil 20 per cent.
In the lean season when prices are likely to go up, the regulatory duty may be lowered considering consumer interest. He has called upon other bodies representing the interests of processors and crushers to raise their voices in tandem with SEA. Unless there was a strong and united opposition, the day is not far when the vegetable oil trade in the country would be dominated and dictated by the international traders who supply a mere 25 per cent of the total edible oil requirement in the country, he warned.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.