The Solvent Extractors’ Association of India (SEA), representing the edible oil industry, has called on the government to raise the duty difference between crude and refined palm oil from the current 7.5% to 15%. In a letter to its members, SEA President Ajay Jhunjhunwala highlighted the challenges faced by India’s vegetable oil refining industry, emphasizing the need for protective measures.
He pointed out that India’s vegetable oil imports reached a record high of 167.1 lakh tonnes in the recently concluded 2022-23 oil year. Edible oil shipments alone hit 164.7 lakh tonnes. The SEA President underscored the significance of the Indian edible oil industry, valued at Rs 3 lakh crore (USD 35 billion), and expressed concerns about the challenges posed by the reduced duty differential between crude and refined palm oil.
Jhunjhunwala noted that over the past 12 years, Indonesia and Malaysia have imposed higher export taxes on Crude Palm Oil (CPO) compared to refined oil to safeguard their refining industries. However, India’s duty differential has been reduced to 7.5%, negatively impacting the domestic vegetable oil refining industry.
In light of these challenges, SEA has appealed to the government to increase the duty difference to 15%, aiming to protect the interests of the Indian refining industry. Jhunjhunwala emphasized that the current scenario, with many refining units functioning solely as packers, poses a significant threat to the profitability and viability of the industry.
He also expressed concerns about the ban on exports of deoiled rice bran, stating that the ban negatively affects solvent extraction without achieving its intended purpose of reducing dairy costs. Jhunjhunwala urged the concerned ministries not to extend the ban beyond November 2023 and mentioned plans to meet with ministers and senior officials in the coming days to seek a positive outcome.