Solvent extractors want import duty back on edible oil

Solvent Extractors’ Association (SEA) is seeking immediate imposition of import duty on edible oils in order to curb more defaults following continuous crash in prices, a senior official said on Monday.

“We are likely to meet government officials again in a couple of days and request to impose import duty on edible oils,” Ashok Sethia, president, SEA, told NewsWire18.

In a bid to bring down the prices, India scrapped import duty on crude edible oils on March 31. On refined oils, the duty was fixed at 7.5 per cent.

It is high time the duty is reinstated, as prices of oil and oilseeds have plummeted both in overseas and domestic markets, hurting the entire industry and farmers, said Sethia.

Fall in prices of crude palm oil, which constitutes around 80 per cent of India’s edible oil imports, has already resulted in import defaults of 200,000-300,000 tonnes by September end.

“CPO prices have fallen by another 25 per cent in the last 7-8 sessions and the imports could reach 550,000-600,000 tonnes,” Sethia said.

On Monday, benchmark December CPO futures on Bursa Malaysia was trading at 1,775 ringgits (Rs 23,944) per 1 tonne, compared with record high of 4,486 ringgits in March.

DOMESTIC PRICES: Farm gate soybean prices in local markets have fallen below Rs 1,600 per 100 kg, when arrivals are around 250,000 bags (of 100 kg each).

“Arrivals are likely to touch 1 million bags in the next 8-10 days, and the prices may fall further, hitting the farmers hard,” Sethia said.

The situation in forward markets is even worse.

In Latur, Maharashtra, crude soyoil November forward was on Monday sold for as low as Rs 410 per 10 kg, a whopping Rs 100 (per 10 kg) discount to refined soyoil prices.

Normally, crude soyoil trades Rs 40-50 below refined soyoil. Refined soyoil was on Monday trading at Rs 540 per 10 kg, according to NCDEX data.

“Crushers were selling crude soyoil in panic fearing more fall in the prices,” said a trader at Latur Agricultural Produce Market Committee.