Login ID:
Password:
Partner Login
Contact Us : 7066511911

Government has lost revenue without the consumers getting any relief from import duty cuts on edible oils: SEA

22 Oct 2021 10:51 pm
 Comments 0 Comments  |  Comments Post Comment  |  Font Size A A A 

The government has lost revenue without consumers getting any relief from the recent reduction of import duties on edible oils, Atul Chaturvedi, President, Solvent Extractors Association of India (SEA), said on Friday in a letter to the members of the industry body.

“With edible oil prices relentlessly marching northwards, our Government finally fired the last

bullet by reducing import duty on crude Soya and Sun Oil to Nil and on Refined Oils to 17.5%, Chaturvedi said in his letter.

Here is the letter written by SEA to its members:

Dear Friends, We are living in interesting times which reinforces my firm belief that if we try to curb the freedom of individuals for a long time the rebound at release is like steam coming out of a pressure cooker. How else does one explain the massive bull run in all commodities, including edible oils, once the lockdowns eased and a sense of normalcy returned in our lives. Revenge consumption as witnessed in Kolkata where famous restaurants recently had to close for want of adequate food is a sample of the vengeance being displayed by consumers. Airlines have started running full, tourist destinations are showing House Full signs and prices are going through the roof. Welcome to the Post Covid scenario panning out even before the final nail has been put in the Pandemic.


Association 50th AGM & Globoil

With travel restrictions easing and confidence returning, we decided to do away with Virtual SEA AGM and GLOBOIL. Our confidence was not misplaced as the attendance at the Seminar was very good. The icing on the cake was the wonderful venue Goa. No better place to unwind and relax after being in splendid isolation for almost 18 months. SEA had the pleasure of playing host to Argentinian Ambassador H.E Hugo Javier Gobbi and Indonesian Charge d’ Affairs H.E Rizki Safary. The highlight of the evening apart from Awards Function was the engaging presentation on NMEO-Palm by Balram Yadav, M.D. of Godrej Agrovet. The Globoil India 2021 on the following two days was also a resounding success with Speakers and delegates from across the world being present in person and on line. Human beings are gregarious by nature and this gives us confidence that Virtual cannot entirely replace physical conferences. The need to connect and interact physically is too strong and cannot be satisfied by Virtual meetings alone.

Import Duty Reduction

With edible oil prices relentlessly marching northwards, our Government finally fired the last bullet by reducing import duty on crude Soya and Sun Oil to Nil and on Refined Oils to 17.5%. While we understand and sympathise with the dilemma of policy makers we have been saying time and again that during times of scarcity and our continued heavy dependence on imports this move would actually end up being counter productive. Our worst fears have once again proved correct as import values have gone up significantly and negated the full impact of duty reduction. Government has lost revenue without the consumers getting any relief.

National Mission on Oilseeds-Wake up Call

The recent massive Bull run in edible oil prices should sound alarm bells in decision making circles and galvanise them into taking proactive action on our Prime Ministers Pet Project of "Atmanirbharta in Edible oils". It is surprising that thrust on oilseed development is still a low priority even though our dependence on imports is close to 65% and import bill ballooning. Admittedly GoI has announced Rs.11,000 crore investment in Oil Palm project. Needless to say Palm has very long gestation of 5 to 6 years and cannot be the only answer to augmenting edible oil supplies. With countries becoming more and more inward looking, its high time we wake up and encourage oilseeds like GN, Soya and Mustard in Mission Mode or else our Edible oil security would remain highly compromised. Needless to say they are low hanging fruits with immediate results unlike Oil Palm.

Order to monitor Stock

The Government in order to have data for the stock of oil and oilseeds, issued order that the states should set the limit for the stock of oils and oilseeds that a trader or an industry can hold. In this regards Shri Sudhanshu Pandey, Secretary F&PD also recently interacted with the industry to understand the difficulty faced by the industry for declaring the stocks held by each company. It looks, many State Governments are reluctant and yet to notify the stock limit in their respective states.

Banning Mustard Contract by SEBI

The run away prices of rapeseed-mustard has compelled SEBI to instruct NCDEX to stop issuing new contract in Futures & Options for rapeseed-mustard w.e.f. 8th October ’21 and permitted only squaring up existing positions, aiming to cool down its prices. This situation would not have arisen, had SEBI / NCDEX taken measures initially by imposing margin / circuit breaker etc. from time to time. Futures Trade is necessity for price discovery and helps industry and farmers. Shooting the messenger can never be the solution to bring down prices as has been amply demonstrated after this action.

Boost for RBO Production

It is heartening to note that Shri Sudhanshu Pandey, Secretary, Department of Food and Public Distribution has advised the Chief Secretaries of all the states and UT, that rice mill clusters be upgraded with latest technology. This will provide better quality and quantity of rice bran to the industry and would improve the quality of rice bran oil.

Soymeal Imports last date extended

Normally, the ‘last date’ for import is the date of landing of the goods in the country. Yet to enable soymeal imports from far off countries, the government has notified that ‘last date’ would be date of ‘Bill of Lading’/’Lorry Receipt’ and the material should arrive in India on or before 31st January 2022. But in a set back, the government of Bangladesh has recently prohibited exports of soymeal due to such a demand by their poultry & live stock industry.

Proposal for increase in GST on Coconut Oil

The GST Council in their last meeting had proposed to increase GST on coconut oil to 18% from 5% on its package of less than 1,000 ml. The Association quickly represented against this ill conceived proposal to GST Council members as well as Agriculture Ministers, Finance Ministers and Chief Ministers of the various states growing coconut and producing coconut oil expressing such a step is detrimental to the interest of coconut farmers as well as the consumers. The matter is put on hold for the time being and would be considered after discussions in GST fitment committee and the GoM constituted for GST rate rationalization. The Association has once again sensitized the Members of the GST Council( Finance Ministers of the States & UTs) to maintain GST rate uniformly across all pack sizes of coconut oil at 5% rate.

Rebounding Kharif Oilseed Crops

The one silver lining in this relentless bull run in edible oils is the initial reports of rebounding Kharif Oilseed production and prospects of a very high acreage of Rabi mustard. Initial reports emanating from mustard growing regions indicate that farmers are sufficiently enthused with high prices and diverting land from other crops. Our very own Bhisma Pitamah, Govind bhai Patel and SEA's team conducted Groundnut crop survey in Gujarat recently. They are estimating a crop of 38.55 lakh tonnes in Gujarat alone, while IOPEPC has estimated all India groundnut kharif crop at 82.0 lakh tonnes. This coupled with SOPA assessment of 118.9 lakh tonnes for Soya , our crushing industry should have adequate supply of raw material during the year.

Wishing you all a Very Happy, Cheerful and Safe Diwali.

With Warm Regards, Yours sincerely,

(ATUL CHATURVEDI) President Date: 22nd Oct. 2021


       
  Rate this story 1 out of 52 out of 53 out of 54 out of 55 out of 5 Rated
0.0

   Post comment
Comment :

Note : This forum is moderated. We reserve the right to not publish and/or edit the comment on the site, if the comment is offensive, contains inappropriate data or violates our editorial policy.
Name :  
Email :  
   

Top | Post Comment  

Latest Special Reports
Week Ahead: Pulses prices likely to remain mixed amid w...
Week Ahead: Pulses market may witness improved buying a...
Canada's 2021-22 Dry Peas Supply may Fall 37% y/y to 3....
Week Ahead: Pulses may trade firm on low level buying a...
Week Ahead: Pulses market unlikley to see further downs...
more
Top 5 News
Weekly: ICE cotton posts triple digit loss amid strong...
Week Ahead: Pulses prices likely to remain mixed amid w...
US Cotton Net Export Sales for Nov 12-18 up 44% W/W at ...
US Soybean Net Export Sales for Nov 12-18 up 13% W/W at...
Uniform rate of 12% for entire value chain of MMF texti...
Top 5 Market Commentary
Sugar Stays Stable amid Sluggish Demand, Market Awaits ...
Wheat Declines by up to Rs 30/quintal in Bihar, MP, UP ...
Mustard Seed, Oil Fall further amid Negative Global Cue...
Cotton prices edge lower amid slowdown in global market...
Branded processed pulses at Mumbai APMC market- 27th No...
Copyright © CC Commodity Info Services LLP. All rights reserved.