Edible oil industry demands hike in import duty gap between crude and refined palm oil

Amid a sharp rise in imports of refined palm oil, edible oil industry body, SEA demanded that the government should increase the difference between the import duty levied on crude palm oil and on its refined form.

The Solvent Extractors Association (SEA) of India has demanded the import duty gap should be raised to 15 per cent from the existing 7.5 per cent in order to provide a level-playing field to domestic refiners.

SEA, in a representation made to Food and Consumer Affairs Minister Piyush Goyal, said the current lower import duty difference of 7.5 per cent between CPO (Crude Palm Oil) and RBD (Refined, Bleached and Deodorised) Palmolein is benefitting Indonesia.

Once the duty difference is increased, the SEA said, RBD Palmolein selling prices by Indonesian refiners will come down. It will also result in huge foreign exchange saving for the country. “We, therefore, request you to kindly consider to raise duty difference to 15 per cent from present level of 7.5 per cent, which will enable the domestic refining industry have a level-playing field,” it said.

SEA further said that India’s CPO imports are replacing refined palmolein in last several months. Refined palm oil imports account for over 30 per cent of the country’s total palm oil imports, thereby reducing capacity utilisation of Indian refiners, apart from huge disparity in processing.

“Our palm refining industry would be reduced to being mere ‘packers’ seriously compromising heavy investments made in industry. We feel this situation needs to be corrected before investments turn sour and add to the NPAs (Non-Performing Assets) of lenders,” SEA said.

Both Malaysia and Indonesia have huge refining capacity and lower tax on refined palm oil, and this gives huge margins to Indonesian refiners, it added. India meets 60 per cent of its edible oil requirement through imports.

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