No proposal to raise import duty on edible oils: Govt

The government today said it has no plans to raise import duty on edible oils even as the vegetable oil industry SEA has sought the hike for refined oils to curb cheap imports and protect domestic refiners.

Import duty on crude edible oils is about 2.5%, while on refined oils it is at 7.5%. The duty difference between the two oils has narrowed to 5%, thereby encouraging the shipment of refined edible oils.

"At present, government has no proposal to increase import duty on edible oils," Food and Consumer Affairs Minister K V Thomas said in a written reply to the Lok Sabha.

He replied in the negative when asked whether increase in the imports at reduced duty has led to fall in prices and adversely affected domestic production of oilseeds and oil.

Due to import duty at the current level, sufficient supply of edible oils has been maintained and made available to consumers at a reasonable prices, he added.

Thomas said edible oils imports have risen due to stagnant oilseeds production and higher consumption.

Except for coconut oil, domestic production of oilseeds is either stagnant or declined in last three years. "Prices of these edible oils have increased," he noted.

India, the world's second largest cooking oil importer, purchased 2.78 million tonnes of edible oil from the global market between November 2012 and January, this year.

Industry body Solvent Extractors Association (SEA) has been demanding an hike in import duty of refined oils to 12.5% to curb imports and protect domestic refineries.

To a separate query on export of government-held wheat stocks, the minister said about 29.23 lakh tonnes of the grain has been shipped out of the total 45 lakh tonnes approved for exports through public trading agencies.

Wheat exports via PSUs are being done by floating global tenders at a floor price of $300 a tonne. The economic cost of wheat is Rs 17,990 per tonne for 2012-13, while sale of wheat tenders finalised so far is at Rs 16,889 per tonne.

"There is no need to change this policy at present... If the 29.23 lakh tonnes of wheat exported so far had continued in central pool stocks, it would have cost Rs 2,500 per tonne per annum in storage and interest charges only."

Besides 45 lakh tonnes of wheat exports, the government recently allowed export of additional 50 lakh tonnes of the grain from the FCI stocks via private traders. The tenders for are yet to be issued.

Wheat exports from the government stocks are allowed for clearing space for the new crop, which has started arriving in the market in full swing.