Edible oil industry stands divided on import duty

New Delhi, Oct 26 (PTI) Within days of Food MinisterSharad Pawar's hint of imposing import duty on edible oils,Vanaspati manufacturers have opposed such a move. In addition to the manufacturers' opposition, solventextractors, who use oilseeds to run their plants, have alsodemanded that government immediately levy custom duties toprotect domestic farmers. The Centre in April this year removed import duty oncrude edible oils from levels of 40-50 per cent, while itannounced 7.5 per cent levy on all imported refined oils,including expensive olive oil. The measure was part of severaldecisions taken by the government to contain inflation. Pawar had said last week that the government would reviewimport duty on edible oil after Diwali, falling on Tuesday. In a letter addressed to Pawar and Finance Minister PChidambaram, Vanaspati Manufacturers Association and IndianVanaspati Producers Association have requested the governmentnot to make changes in the present customs duty structure oncrude palm oil (CPO) and crude soyabean oil in the interest ofthe industry as well as that of consumers at large. "The present duty structure be kept intact by allowingimport of crude edible oils at nil rate of customs duty and atthe same time imposing the customs duty of 7.5 per cent onrefined edible oils so as to maintain a duty difference of 7.5per cent in rate of customs duty between crude and refinedoils," the vanaspati makers said. On the other hand, 700-member body Solvent Extractors'Association of India (SEA) wants immediate imposition ofimport duty on edible oils fearing that domestic market wouldget flooded by imported edible oil owing to sharp decline inglobal prices. SEA President Ashok Sethia, in a representation toFinance, Commerce and Food Ministers has said prices ofsoyabean and groundnut may drop below MSP duringNovember-December with arrival pressure. The industry body has also demanded lifting of ban onexports of edible oils, removal of stock limits on oilseedsand oils and restart of futures trading in soybean oil in wakeof falling prices of oils in the market. Sethia said soyabean price (ex-mandi) was Rs 1,525-1,550a quintal, while its MSP is Rs 1,390 a quintal and groundnutin shell was quoted at Rs 2,250 per quintal against MSP of Rs2,100 a quintal as on October 24. However, the Vansapati Consultative Committee was of theview that a fall in global prices has not been reflected sofar in the domestic market so there is no case for revision inthe import duty structure. The committee pointed out that CPO prices have declinedby over 56 per cent to USD 507 a tonne and soyabean oil byover 35 per cent to USD 860 a tonne between April 1 andOctober 18. However, the decline in domestic soyabean oil prices isonly 5.7 per cent to Rs 4,900 a quintal during April-Octoberperiod. Domestic prices of groundnut and sunflower oil havealso dipped by 7.6 per cent and 9.6 per cent, respectively.But during the same period, mustard oil rates have increasedby 9.7 per cent to Rs 6,100 a quintal. "There is absolutely no need for imposing customs duty onedible oils as such measure will only push up domestic pricesof edible oils," the committee said in a representation. PTI