The Government is weighing the option of raising import duty on RBD palmolein (or refined oil) imported mostly from Indonesia and Malaysia as domestic refiners have been complaining about cheap imports forcing them to operate below capacity.
The Revenue Secretary recently held a meeting with the Secretaries from the Commerce, Agriculture and Food Processing Ministries to discuss the steps that could be taken to alleviate the problems being faced by farmers of oilseeds and domestic refiners who are operating below capacity.
“The option of raising the import duty on RBD palmolein was discussed in the meeting. All ministries and departments concerned gave their inputs. It is now up to the Revenue Department to take a call on the matter,” a Commerce Department official told
The low import duty differential between RBD palmolein which attracts a duty of 7.5 per cent and crude palm oil which attracts a duty of 2.5 per cent is also a big problem, say refiners.
Many refiners say that the duty differential between refined oil and crude oil should be at least 14 per cent for the domestic refining industry to be sustainable.
“The Secretary’s group discussed all the nuances of the situation. We hope the revenue department will take a decision soon on the matter,” the official said.
Edible oil imports
The Solvent Extractor’s Association of India has been demanding an increase in duties on RBD palmolein to 20 per cent.
Total edible oil imports in the current year (November-June) were up 11 per cent at 6.94 million tonnes. The imports of refined oils stood at 1.54 million tonnes during the November 2012 -June 2013, about 27 per more than corresponding last year.
B.V. Mehta, Executive Director of SEAI, said that the rising trend of refined oils imports on a month-on-month basis as witnessed in the past few months was worrisome. “The domestic refiners are becoming packers of imported refined oils,” Mehta said highlighting the need to hike import duty to protect the huge investments made into refineries.
Refined oils, which traditionally accounted for a tenth of total edible oil imports, touched a high of 44 per cent in May, 2013. In the first eight months of oil year starting November 2012 till June 2013, the refined oils constituted 22 per cent of total edible oil imported into the country.