Jan 2, 2019
Recently the government of India has reduced the import duty on refined palmoleins from 50% to 45% with immediate effect. It reduced duty from 40% to 37.5% on raw palm (CPO). The government’s move has prompted protests by the country’s edible oil industry. The domestic industry says the move will upset India’s domestic refining companies.
A notification regarding the import duty incident has been issued by the Ministry of Finance, the notification states that tariffs have been deducted under the ASEAN Agreement and the Indo-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA), Solvent Extractors Association of India (SEA), opposing the move, said that after the reduction in import tariff, the difference between crude palm oil and refined palmolein has been reduced from 10% to 7.5%.
“Under the ASEAN and IMCECA agreements, the government reduced the import duty on palmolein from 50% to 45% and on crude palm oil from 45% to 37.5% with effect from January 1, 2020. The duty difference between crude and refined palm oil has been reduced to 7.5% as against 10% earlier. This would make import of refined palmolien much more attractive and will seriously hurt the domestic refining industry. We fear import of refined palmolien would increase and the capacity utilisation of our industry would be affected, leading to a potential loss of employment,” Atul Chaturvedi, president of SEA, said.
“This action of the government has come as a blow not only to our domestic palm oil refining industry, but to our oilseed farmers as well. After a long time, domestic oilseeds had started selling above MSP and improving farm incomes. Lower import duty would make it difficult to defend MSP and the new-found enthusiasm of oilseed farmers would be dampened,” he said.
“This would be counterproductive and contrary to our stated objective of increasing domestic oilseed production. Needless to mention, our edible oil imports are now touching 70% of our consumption”, Chaturvedi pointed out.
To safe guard its domestic industry, Indonesia imposed an export duty of $50 on crude palm oil and $30 on refined palmolein with effect from January 1.