Time to hike edible oil import duties: SEA

As India’s 2010 pact with Malaysia and Indonesia came to an end, the Solvent Extractors Association of India (SEA) on Monday said the government should hike Customs duty on soya, sunflower and crude palm oils and encourage domestic production.

The trade body also urged the government to ban the import of refined palm oils or palmolien in order to encourage domestic production. These are some of the short-term measures SEA has submitted to the government for making India self-sufficient in edible oils.

Low import duties

“No nation can afford to compromise its edible oil security to the extent of almost 70 per cent of its annual consumption. This situation calls for corrective actions to be taken up on priority,” SEA President Atul Chaturvedi said in a statement. “Low import duties on edible oils over the years have practically made our farmers lose interest in oilseed cultivation. No wonder India’s oilseed production has remained stagnant but consumption of edible oils driven by improved affluence has skyrocketed and has been growing at the rate of 3 to 4 per cent per annum,” he said.

However, the agreements that India had signed with Indonesia and Malaysia in 2010 were not allowing India to raise duties. “The good news is that the agreements have now lapsed and India is free to raise duties,” he said. SEA has suggested the government increase import duties on soya and sunflower oils to 45 per cent from the current 37.5 per cent, while those on crude palm oils to 50 per cent. Besides, import of refined palm oil or palmolien should be totally banned, it added.

Non-traditional oils

That apart, high oil import duties will also help in better exploitation of non-traditional sources of oils such as rice bran, cottonseed and tree-borne oilseeds, he added. SEA also pitched for the launch of an oilseed mission without delay and entry of private companies in this sector.

Among long-term measures, SEA has suggested the government encourage Punjab and Haryana farmers to divert land to corn or sunflower in kharif season and mustard in rabi season.

“We should target 25 per cent land diversion as it would go a long way in breaking the wheat-rice cycle in these States. We keep producing wheat and rice much in excess of our requirement and are importing edible oils. This diversion will also help in reducing water consumption in these States,” the SEA president said.

Palm cultivation

SEA regretted that palm is not treated as a plantation crop in India unlike in other parts of the world. “Due to this anomalous situation of not treating oil palm as a plantation crop, the private sector cannot invest in palm plantation even though huge opportunity exists in India,” it said.

As per the government study, India has the potential of cultivating palm on 2 million hectares. The current area under oil palm is only 0.3 million hectares. “Palm oil yield is around 4 tonne per hectare, which is the highest among oilseeds and will go a long way in reducing import dependence,” SEA said.

The potential of palm oil production in India is almost 8 million tonnes against the current production of about 0.25 million tonnes. There is a need to fix a target of bringing a minimum of 1 million hectares under oil palm in the next four years, it added.