Ajay Tandon, president, Solvent Extractors' Association of India (SEAI) has, in a recent letter to Union food and consumer affairs minister, suggested that the import of edible oils should be regulated in conformity with the domestic production of oilseeds and oils as well as position of domestic demand through tariff mechanism. He urged the Government to introduce the concept of variable duty structure. ``If prices fall below the level, duty could be increased. It may be decreased for higher level, considering the international prices of edible oils, domestic supply and the consumers' interest,'' he said.

The country imported 17,98,000 tonnes of edible oils during November, 1998 to May, 1999, against 5,70,000 tonnes during the corresponding period of last year, registering an increase of 320 per cent.

The30 to 45 per cent fall in international prices of edible oils such as palm, rapeseed and soya oils since September 1998, has prompted this excess import. This has affected internal trades of countries like India, Pakistan, China and also of Indonesia who is primarily an exporting country for palm oils.

According to Tandon, other than India, all countries have worked out different protective measures for the domestic producers.

The Indonesian Government reduced the export duty by 10 per cent to make their commodity competitive in the international markets. Pakistan, on the other hand, with a view to counter the excessive imports and to protect the local growers, has raised the import duty by Pak Rs 2,000 per tonne recently in addition to earlier enhancement of import duty by Pak Rs 300 per tonne effective from April, 1999, because of the decline in prices in the international market.

The import duty on imported palm oil at present is Pak Rs 9,850 per tonne and on crude soyabean Pak Rs 8,850 atonne.

China also effected a major policy change which encouraged import of raw materials rather than finished products. In fact, Chinese government imposed variable additional tariff at 13 per cent on the import of soyameal to encourage beans import which, in turn, supported the domestic crushing industry and production of vegetable oils indigenously. China also encouraged the import of rapeseed rather than rapeseed oil or meal to keep their processing units active.

On the contrary, India took a conservative attitude towards changing its policy on edible oil imports. SEAI president stated that the Government of India reduced its import duty to 15 per cent from 20 per cent in July, 1998, on the ground of high international prices and lower internal production of oilseeds so that deficit of edible oils demand may be met through easy imports. But the situation has taken a reverse turn at present when production of oilseeds and oils has increased considerably. At the same time international prices fell. SEAIthus feels that the government should take a pragmatic approach towards tackling the situation to protect the interest of growers as well as the industry.