SEA calls for zero import duty on soyabean, sunflower oils till September this year

Stating that tariff rate quota (TRQ) for import of crude soyabean and sunflower oils could disturb smooth supply chain of edible oils, industry body Solvent Extractors Association (SEA) asked the government to reduce import duty to zero on these two key cooking oils till September 2022, instead of implementing the TRQ system,.

TRQ is a quota for a volume of imports that will enter India at specified or nil duty, but after the quota is reached, the normal tariff applies to additional imports.

On May 24, the government had notified TRQ of 20 lakh tonnes of crude soybean oil and crude sunflower oil each for 2022-23 and 2023-24. “The intention of the government in introducing TRQ is to increase supply and help moderate prices in the country, but it may end up squeezing imports,” Mumbai-based Solvent Extractors Association of India (SEA) President Atul Chaturvedi said in a letter written to Food Secretary Sudhanshu Pandey.

The actual effect of TRQ in the market place will only be felt after 2-3 months of its implementation. In the intervening period, prices of edible oils have the potential to rise as festival season in India starts shortly and consumption also goes up once rain sets in, he said. Bottom of Form “To have immediate impact, it may be worthwhile to simply reduce duties on these oils immediately to achieve the desired objective,” he added.

The SEA President suggested that the government may reduce import duty on these two edible oils to zero for the time being till September instead of issuing TRQ. “This will have a salutary effect on domestic edible oil prices. Government may review the situation in September and take suitable call basis oilseed production in kharif,” he said. He also said global oil prices are under pressure and Indonesia has also been forced to issue export licences as their storage tanks are full. If the government reduces import duty on only soyabean and sunflower oils then that will ensure palm oil prices move southwards and impact full edible oil complex in India.

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