Govt should hike import duty on refined oils to 27.5%: SEA

Government should increase the import duty on refined oils to 27.5 per cent from 20 per cent at present, to check the influx of cheaper inbound shipments, a trade body said today.
"This will ensure the farmers will get remunerative price for their produce and help the domestic refiners to improve capacity utilisation," said Solvent Extractors' Association of India (SEA) President Pravin Lunkad in a statement.
The body said the government must revise the duty difference between crude and refined oils to at least 15 per cent by raising import duty on refined oils to 27.5 per cent.
"This will ensure full value addition is done to refining, packaging, trading and marketing of edible oil in our country," the statement added.

Domestic edible oil industry and farming communities are hit by the current upward trend of edible oil imports, which have increased by 24 per cent during 2014-15 over the same period last year as compared to 14.4 million tonnes of edible oil that was imported from November 2014-October 2015.
Globally, the prices of edible oil are at a historic low since 2008, and this has affected the domestic players, Lunkad said.

To pursue the matter, SEA members had a series of meetings with the ministries of Commerce, Agriculture and Consumer Affairs & Public Distribution, including meeting with Ram Vilas Paswan.

Lunkad said the minister was quite receptive to the cause of the industry and assured that appropriate action will be taken to safeguard the interest of the domestic farmers and the refiners.
He pointed out the stagnant and at times faltering oilseeds production, increase in population and increased standard of living has enhanced oils imports from 9.981 MMT in 2011-12 to 14.42 MMT in 2014-15. Further, the country is also losing out on the oilmeal export front, as a larger quantity is consumed by domestic feed industry to cater to the growing population due to stagnant oilseed production.
The association has pleaded with the Commission for Agricultural Costs and Prices to recommend reduction of the import duty to 5-10 per cent from the current 30 per cent on high oil-content oilseeds like rapeseed/mustard (Canola) and sunflower seed. This will have a multitude of advantages like reduced imports of edible oils, larger availability of oilmeals for local consumption by feed industry and exports.

Further, the oilseeds imports will not have any adverse impact on farmers as they are protected with an assured MSP by the government, he said.
The association has also requested the Ministry of Finance to review and revise the weightage of individual oils within edible oil basket in the WPI, so that it correctly reflects the WPI for edible oils in the food basket.