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Government should not reduce import duty on edible oil imports, says Solvent Extractors' Association
The edible oil prices have seen a sharp uptick in recent times. The pack is led by crude palm oil prices which are up 47 percent this year. This is followed by soybean with nearly 30 percent gains, and refined soy oil is not too far behind with nearly 25 percent gains. RM seed is up 18 percent.
The edible oil prices have seen a sharp uptick in recent times. The pack is led by crude palm oil prices which are up 47 percent this year. This is followed by soybean with nearly 30 percent gains, and refined soy oil is not too far behind with nearly 25 percent gains. RM seed is up 18 percent.
There have been concerns about output from the global market. Major producers, Malaysia and Indonesia, have seen a decline with crude palm oil being used for biodiesel. The Indian market supply has also because of erratic monsoon and weather.
Solvent Extractors' Association of India has put out a note on the possibility of the import duty being altered on palm oil. It says that the government should not reduce the import duty and rather channel the money to the Oilseed Development Fund.
Atul Chaturvedi of Solvent Extractors' Association of India told CNBC-TV18, “For far too long we have pampered urban consumer at the cost of the oilseed farmer. If you really look at the oil prices across last two decades, they have been more or less flat.”
“We feel that this is a big opportunity for the government to give the right kind of focus to the oilseed sector which has been languishing for far too long. If the prices go up, so would the revenue as far as the customs duty is concerned,” he added.
Chaturvedi went on to explain the math. "Our take is that government revenue, which we are collecting, is currently about Rs 30,000 crore and with 25 percent price increase, the revenue should be about closer to Rs 40,000 crore. So additional Rs 10,000 crore, if it is pumped into the oilseed sector, is going to do a world of good."
Speaking about how the oilseed sector is expected to perform going forward, he said, “We feel that the worst as far as the edible oil is concerned is behind us. Going forward, prices are not going to come off."
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