Edible oil industry body SEA has demanded that the government should increase the duty differential between crude and refined palm oil from 7.5 per cent to 15 per cent to curb imports of refined cooking oil and protect domestic players.
In a letter to its members, Solvent Extractors Association of India (SEA) president Ajay Jhunjhunwala pointed out that the Indian vegetable oil (combining edible and non-edible oils) refining industry is “facing challenges”.
“The Indian edible oil industry, with a size of Rs 3 lakh crore ($35 billion), is of vital importance. Over the last 12 years, Indonesia and Malaysia have imposed higher export taxes on crude palm oil (CPO) than on refined oil. Their refining Protect the industry. This has made refined oil cheaper, making Indian capacity redundant and unutilised,” he said.
In India, the duty differential between CPO and refined palm oil has been reduced to 7.5 per cent, “serving the interests of the refining industry in Malaysia and Indonesia”, Jhunjhunwala said.
He pointed out that the low duty differential is negatively impacting the domestic vegetable oil refining industry.
“In light of this, SEA has once again appealed to the government to increase the duty differential between crude and refined palm oil from 7.5 per cent to 15 per cent,” Jhunjhunwala said.
The SEA Chairman said India’s vegetable oils imports reached an all-time high of 167.1 lakh tonnes during the recently concluded 2022-23 oil year (November-October), with shipments of edible oils hitting a record high of 164.7 lakh tonnes. reached at.
“About 60 per cent of the palm oil segment is imported. RBD palmolein prices are lower than CPO due to high export tax-cess imposed on crude by the exporting countries. This situation is a significant threat to the profitability and viability of our refining industry. “Many units are now operating only as packers,” he said.
Jhunjhunwala said this scenario is undesirable as it could lead to an increase in non-performing assets (NPAs) for banks and shareholders, as well as unemployment in the industry and value chain.
The President also expressed concern over the ban on export of deoiled rice bran.
“The ban negatively impacts solvent extraction, without achieving its intended purpose of reducing dairy costs because the price of deoiled rice bran has minimal impact on milk and dairy prices,” he said.
Jhunjhunwala said the price of deoiled rice bran has fallen sharply from Rs 18,000 per tonne to around Rs 13,500 per tonne in August 2023.
He told the associations members, “SEA strongly urges the concerned ministries not to extend the ban on DORB exports beyond the end of November 2023. We will also meet the concerned ministers and senior officials in the coming days in the hope of a positive outcome ” ,
(This report has been published as part of an auto-generated syndicated wire feed. Apart from the headline, there have been no edits to the copy by ABP Live.)