OPDPA hails Central move to hike import duties on palm oil

Oil Palm Developers and Processors Association today welcomed the Centre's move to increase the import duties on palm oil.
"This is a tremendous boost to the industry as the duty hike will help farmers to get remunerative price for their produce and help the domestic processing industry remain self-sufficient," the association said in a statement.
The government recently announced raising of import duty on crude palm oil to 15 per cent from current 7.5 per cent and refined palm oil to 25 per cent from the current 15 per cent.
The impact of increase on crude palm oil alone translates to around Rs 40-60 crore extra in the hands of the farmer, it said.

Sanjay Goenka, President of OPDPA, said the move by the government brings in a strong sense of self-sufficiency to the oil palm ecosystem.
"The price paid to the farmer is based on the realisation that palm oil fetches in the market. Increase in import duty helps in increase of price of palm products, thereby resulting in higher price of the produce to the farmers," Goenka said.

While this development is extremely positive and addresses some of the challenges, there is a need to ensure that the farmer is protected from price fluctuations, he added.
Currently, the price of the produce is fixed by a scientific formula, derived by the a committee, which links the price payable to the farmer to the landed cost of crude palm oil. A price stability mechanism is required to keep the farmer's price remunerative at all times, the statement said.

"The association is continuing its persuasion with the government to protect the interests of the oil palm farmer by requesting the government to bring in a strong MSP framework that insulates the farmer from market forces," it said.