Soon after the central government declared a hike in minimum support prices (MSPs) for most agricultural commodities, Saurashtra Oil Mill Association (SOMA) has urged the government to control imports of pulses and edible oilto keep domestic production competitive and ensure that farmers get the benefit of higher MSPs.
Pulses in general are sold below MSP throughout the season even as fairly large quantity of the commodity was imported. Similar is the case with oilseeds. Farmers sold them below MSP even as our imports constitute more than half of edible oil demand in the country.
During refining of palmolien oils, a very significant quantity, about 30 per cent, is lost as a byproduct. This byproduct, known as Palm stearin, is used mainly for manufacturing of soaps and detergents. This commodity, if imported from other countries, does not attract any import duty.
In a letter written last week to Union Agriculture Minister Radhamohan Singh, SOMA president Sameer Shah said: “We draw your attention towards the fact that many agro products are getting sold well below the MSP. Products like groundnut, soyabean, mustard, tur, among others, fetched lower prices than MSP when farmers sold them in Agricultural Produce Market Committee (APMCs).”
The SOMA president said that of the estimated 25 million tonnes consumption of edible oils in the country, around 15 million tonnes were met through imports. “Given the huge gap between consumption and local supply, imports are the only solution in the short term. But the government will have to take steps to ensure that domestic oil industry remains competitive against imports in the long run,” he said.
SOMA has also demanded that import of palm stearin should be restricted, as duty-free import of the commodity from Malaysia is hurting the domestic refining industry. “We demand that either some import duty should be imposed on imports of palm stearin or the difference in duty between import of refined and unrefined palm oil should be widened to 20 per cent,” Shah said.