Demand for oilseed fund back in the air

The Solvent Extractors' Association of India (SEA) has reiterated its demand for establishing a separate oilseed development fund to raise production.

SEA officials said that if measures to increase production are not taken, the country may end up paying 67 per cent more to import vegetable oils in FY09.

The oilseed production in the country has stagnated at 25-26 million tonnes for the last few years with productivity of 950 kg per hectare.

B V Mehta, executive director, SEA, said, "The government gets Rs 6,000-7,000 crore from the imports of vegetable oils. Even if 10 per cent of this amount is put as a fund for oilseed development, the country could see higher production of oilseeds."

At present, the country imports almost 45 per cent of its vegetable oil requirements annually. Last year, the country imported 55 lakh tonnes of vegetable oils which cost Rs 15,000 crore.

Vegetable oil imports jumped by more than 200 per cent in February.

"The import bill could reach Rs 20,000 crore this year and, if situation does not improve, it could rise to Rs 25,000 crore in the next year," added Mehta.

Slamming the government's move to cut import duties on vegetable oils last week, he said the cuts would just bring a decrease of Rs 2-3 in prices. "Rather, it is the vegetable oils exporting countries which have taken the advantage of such duty cuts."

"Today, Malaysia's (a major exporter) palm oil contract was trading $52 more per tonne. Domestic consumers may not be able to see the benefits of the import duty cuts," said Mehta.

The oil industry has long been demanding to declare Oil Palm as a plantation crop like tea and coffee so that industry can invest in agricultural land to grow Oil Palm.