Refined edible oil import surges in May

Domestic processing industry urges increase in tariff

Monthly import of refined edible oil surged last month, to 2,94,409 tonnes, about 22 per cent of the overall import of 1.03 million tonnes.

After a high of 245,554 tonnes in December 2016, refined oil import fell to 196,623 tonnes in January, 20-21 per cent of the entire import of edible oil.

“Refined edible oil (refined, bleached and diodised or RBD) import into India started increasing thereafter, following export duty levy by the governments of Indonesia and Malaysia, which made import of crude palm oil (CPO) costlier than refined oil,” said B V Mehta, executive director of the Solvent Extractors' Association of India.

To promote local processing industry, the two governments had levied an export duty of four per cent on RBD and 12 per cent on CPO. With this, the duty differential of 7.5 per cent into India got nullified, making the import of RBD into India eventually cheaper than CPO. The industry, therefore, has urged the government to keep the duty differential between RBD and CPO at a minimum of 15 per cent, to promote edible oil processing in India.

The price differential between CPO and RBD is only $5 a tonne, says the industry.

“Rising import of RBD is affecting India in two ways. Apart from hitting the crushing of oilseeds, resulting in lower realisation for farmers, India has started importing of palm stearin, a byproduct of CPO processing. So, by not raising the duty differential to at least 15 per cent, we are encouraging the processing industry in another countries and harming it in our own country,” says Atul Chaturvedi, chief executive at Adani Wilmar, producer of the 'Fortune' brand of edible oil.

India imports a little over 14 million tonnes annually, 55 per cent of the country’s total consumption. CPO is a large part of the import. The edible oil processing industry has urged the government to raise import duty on CPO to 20 per cent and RBD to 35 per cent, from the existing 7.5 per cent and 15 per cent, respectively.