Veg oil industry wants govt to set up central board

Will suggest solutions in consultations with industry representatives.

Saying there’s unprecedented delay in decision making, the vegetable oil industry has urged the government to set up a national body to protect the interest of all stakeholders — traders, processors and consumers.

A central body, which could be called the Oil Board, on the lines of the Spices Board, the Coffee Board and Tea Board, is needed to bring up trade-related issues to the government and suggest solutions in consultations with industry representatives, said Dorab Mistry, director of Godrej International.

Talking on the sidelines of a seminar here recently, he said, “Today, every individual meets government representatives but no ministry official pays enough attention to the problem...the issues remain unaddressed and the industry continues to suffer.” A central body could negotiate with the government on larger issues like tariff fixation, import and export duties and ways and means for increasing domestic production.

There is already a National Oilseeds and Vegetable Oils Development Board, a statutory body, established in March 1984, with the aim of integrated development of oilseeds and the vegetable oils industry. It is under the administrative control of the department of agriculture and cooperation of the ministry of agriculture. With its headquarters at Gurgaon, it is very unrepresentative in its ambit and functioning, is the complaint.

“We require a central trade body to look after the industry’s problems,” said B V Mehta, executive director of the Solvent Extractors’ Association.

Since 45 per cent of India’s vegetable oil consumption of an estimated 15.7 million tonnes annually is met through imports, trade policy issues are quite important. The base price for calculating import duties has remain unchanged for the past five years, says the SEA. Whereas, prices of vegetable oil have almost doubled in that time. A higher tariff would also allow processors to raise prices at home, making the industry more profitable. The SEA is also unhappy at the cuts on import duty on crude and refined palm oil from the level of up to 37.5 per cent two years earlier — it was done to help tame inflation at home, but the industry says their interests were unfairly affected.

SEA also complains that vegetable oil output in India has been stagnant for several years, at 6.5-7 million tonnes. Since domestic consumption has witnessed a steady increase over the years, India’s import reliance has moved up. This, it says, is a dangerous trend. All these problems will be sorted if a central trade body puts these up before the government and suggests suitable measures, said Mehta.