 "CACP for further rationalisation of import duty on oilseeds")
The Commission for Agricultural Costs and Prices (CACP) may recommend further rationalization of import duty on oilseeds, with the aim of easing domestic prices and containing inflationary pressure emanating from food articles that are import sensitive.
According to sources, the ministry of agriculture has advised all its divisions to prepare on priority all measures to combat food inflation. Therefore, a hike in import duty of agricultural commodities is not a preferred option at this point of time, said official sources.
At present, the import duty on crude edible oilseeds is 2.5 per cent while that on refined oilseeds is 10 per cent. A major part of the increase in inflation is due to increase in the prices of food articles including fruits, eggs, meat & fish, and oilseeds. Half of India’s annual demand of 17-18 million tonnes of cooking oil is met via imports of palm oil, while it also buys around 1 million tonne each of soy oil from Latin America, and sunflower oil from Black Sea nations.
Production of four major rainfed oilseeds-groundnut, soybean, sesame, and castor is susceptible to rainfall and even minor variations in rainfall deviates arability of these crops.
As per the latest report of Global Agricultural Information Network, US trade report, India’s total oilseed production in marketing year 2014-15 will be 37.4 million metric tons (MMT), a 2.5 percent decrease from the current year. This estimation was made assuming normal weather patterns during the 2014.
June-September monsoon
The report had estimated tight oilseed supplies leading to oilseed production to 18.4 MMT. According to the report, while India’s edible oil production may decline to 7.7 MMT, but imports will rise to 12.4 MMT to fill any demand gaps.
According to industry observers, this import estimate may increase further due to slow and gradual distribution of monsoon in the country.
The diverse agro-ecological conditions in the country are favourable for growing nine annual oilseed crops, which include seven edible oilseeds (groundnut, rapeseed & mustard, soybean, sunflower, sesame, safflower and niger) and two non-edible oilseeds (castor and linseed). Oilseeds cultivation is undertaken across the country in about 27 million hectares mainly on marginal lands, of which 72 per cent is confined to rainfed farming.
During the last few years, the domestic consumption of edible oils has increased substantially while a substantial portion of our requirement of edible oil is met through import of palm oil from Indonesia and Malaysia. National Mission on Oilseeds and Oil Palm (NMOOP) envisages increase in production of vegetable oils sourced from oilseeds, oil palm and TBOs from 7.06 million tonnes (average of 2007-08 to 2011-12) to 9.51 million tonnes by the end of Twelfth Plan (2016-17).
According to sources, the ministry of agriculture has advised all its divisions to prepare on priority all measures to combat food inflation. Therefore, a hike in import duty of agricultural commodities is not a preferred option at this point of time, said official sources.
At present, the import duty on crude edible oilseeds is 2.5 per cent while that on refined oilseeds is 10 per cent. A major part of the increase in inflation is due to increase in the prices of food articles including fruits, eggs, meat & fish, and oilseeds. Half of India’s annual demand of 17-18 million tonnes of cooking oil is met via imports of palm oil, while it also buys around 1 million tonne each of soy oil from Latin America, and sunflower oil from Black Sea nations.
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The objective of further rationalization of import duty on all varieties of oilseeds is two-fold. Its first purpose is to ensure adequate availability of edible oil and thus oilseeds in the country, so as to check abrupt increase in edible oil prices. Secondly, cheaper import of crude oilseed will ensure employment and productivity of the domestic oil refiners in case there is a shortage of crude oil for processing.
Production of four major rainfed oilseeds-groundnut, soybean, sesame, and castor is susceptible to rainfall and even minor variations in rainfall deviates arability of these crops.
As per the latest report of Global Agricultural Information Network, US trade report, India’s total oilseed production in marketing year 2014-15 will be 37.4 million metric tons (MMT), a 2.5 percent decrease from the current year. This estimation was made assuming normal weather patterns during the 2014.
June-September monsoon
The report had estimated tight oilseed supplies leading to oilseed production to 18.4 MMT. According to the report, while India’s edible oil production may decline to 7.7 MMT, but imports will rise to 12.4 MMT to fill any demand gaps.
According to industry observers, this import estimate may increase further due to slow and gradual distribution of monsoon in the country.
The diverse agro-ecological conditions in the country are favourable for growing nine annual oilseed crops, which include seven edible oilseeds (groundnut, rapeseed & mustard, soybean, sunflower, sesame, safflower and niger) and two non-edible oilseeds (castor and linseed). Oilseeds cultivation is undertaken across the country in about 27 million hectares mainly on marginal lands, of which 72 per cent is confined to rainfed farming.
During the last few years, the domestic consumption of edible oils has increased substantially while a substantial portion of our requirement of edible oil is met through import of palm oil from Indonesia and Malaysia. National Mission on Oilseeds and Oil Palm (NMOOP) envisages increase in production of vegetable oils sourced from oilseeds, oil palm and TBOs from 7.06 million tonnes (average of 2007-08 to 2011-12) to 9.51 million tonnes by the end of Twelfth Plan (2016-17).