Miffed at the government’s decision to allot licences for import of 1.1 million tonnes of refined palm oil, India’s domestic edible oil industry has expressed dismay over the inconsistency in government policy. It has sought a review of the decision.
The Solvent Extractors’ Association of India (SEA) has stated that allowing 1.1 million tonnes of imports will open the flood gates of refined oils in India.
“We are dismayed at this action which has the potential of destroying palm refining industry in the country. This is contrary to our PM’s vision of Make in India,” Atul Chaturvedi, President, SEA stated in a statement.
The Director General of Foreign Trade (DGFT) on January 8 amended the policy to regulate excessive import of refined palm oil into India and placed RBD Palm Oil and RBD Palmolein under “restricted list”.
As per the change in policy, the imports of refined palm oil have to be subjected to licence to be issued by DGFT. It is learnt that the Union Commerce Ministry, which oversees foreign trade, had received over 100 applications for import licences for refined palm oils.
Expressing surprise over the government move, SEA said, “In the last one and half month, edible oil prices in international market as well as domestic market are showing downward trend and there is no shortage of RBD Palmolein or edible oils in the country.”
SEA has also stated that with a massive mustard crop ready for harvesting, allowing refined oil imports will have a great dampening effect on prices of domestic oil seeds. This may result in mustard selling below MSP and once again NAFED getting saddled with huge stocks.
Currently, in Indonesia, RBD Palmolein is cheaper than CPO and with higher levy on CPO at $50 a tonne and lower duty on RBD Palmoelin at$30. Indonesia has great advantage to push the export of RBD Palmoelin into India.
“Further, India’s duty difference between CPO and RBD Palmolein being only 7.5 per cent will open the flood gates for import of RBD Palmolein as we have seen last year during January to September 2019 when the duty difference was just 5 per cent for import from Malaysia. This will also have serious impact on domestic refining Industry and capacity utilizations will go down,” Chaturvedi said.
“The trade has appealed to the Commerce Ministry to stop issuing further licences and review the rationale for issuing such licences which are at variance with our country’s stated objective of Make in India,” the SEA statement noted.