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Mumbai, 21 Nov (Commoditiescontrol) - The Solvent Extractors' Association of India (SEA), representing the country's edible oil industry, has raised serious concerns over increasing refined palm oil imports. The industry body has urged the government to escalate the duty differential between crude and refined palm oil from 7.5% to 15% to protect domestic refiners.
Key Points:
India, a major importer of cooking oil, primarily sources palm oil from Malaysia and Indonesia and soybean oil from Argentina and Brazil.
Refined palm oil (RBD Palmolein) imports surged to 21.1 lakh tonnes in the 2022-23 marketing year, up from 18.4 lakh tonnes the previous year.
SEA President Ajay Jhunjhunwala highlighted the challenges faced by the Indian vegetable oil refining industry, emphasizing the industry's size at Rs 3 lakh crore (USD 35 billion).
Industry Impact:
Jhunjhunwala pointed out that higher export taxes on crude palm oil (CPO) in Indonesia and Malaysia, compared to refined oil, have made refined oil cheaper and adversely affected the Indian refining capacity.
The current duty differential at 7.5% favours the refining industry in Malaysia and Indonesia, impacting the profitability and viability of Indian refiners.
Many Indian refining units are now functioning merely as packers, with the situation potentially leading to increased Non-Performing Assets (NPA), unemployment in the industry, and challenges in the value chain.
Government Intervention Sought:
SEA's request to raise the duty differential aims to bring parity and protect domestic refiners.
India's edible oil imports reached a record high of 164.7 lakh tonnes during the 2022-23 oil year, with palm oil constituting almost 60% of these imports.
SEA also expressed concern over the ban on exports of deoiled rice bran, which has impacted solvent extraction industries and has not significantly affected dairy costs.
Moving Forward:
The SEA president noted a sharp drop in the price of deoiled rice bran and urged the ministries not to extend the export ban beyond November 2023.
Meetings with ministers and senior officials are planned to seek a positive outcome for the industry in the coming days.
(By Commoditiescontrol Bureau; +91-9820130172)
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