Terming blending of crude palm oil with other oils as an "unfair trade practice", leading edible oil manufacturers, packers and traders in the country have demanded that the government broaden the scope of an existing law to ban sale of loose oil.
Currently, the law restricting loose oil sale is in force in New Delhi, which should be broadened across the country, said Pranav Adani, managing director of Adani Wilmer, the maker of Fortune edible oil. At present, Adani Wilmer holds 20 per cent of the market share in branded edible oil segment.
According to Adani, selling of loose edible oil is not permitted in developed countries.
India consumes about 13 million tonnes of edible oils, of which about 7.5 million tonnes are produced domestically, while the rest is met through imports.
Currently, the country sells about 80 per cent of edible oil in loose form, which, according to trade sources, is in the blended form. For example, refined sunflower oil or soybean oil in loose form is a blend of the respective oil and palm oil in the proportion of 65:35.
According to experts, a common man cannot identify the impurity as the blending of palm oil does not change the physical property or taste but the chemical property, which affects the consumers’ health in the long run.
However, branded oil so far remained untouched from blending, said B V Mehta, executive director of Solvent Extractors’ Association (SEA), the Mumbai-based representative organisation of about 1,000 edible oil manufacturers, packers and traders in the country.
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“Surely, it’s an unfair trade practice, which should be restricted through a stringent law,” Adani said today.
Edible oil crushers and packers execute business at a margin between 2.5-3 per cent. However, their margins were shrunk following the 48-per cent increase in MSP last year and an over 60 per cent fall in prices of crude and refined oil from their respective peaks.
As the blending of crude palm oil is paramount across all edible oils, India’s imports of crude edible oil (mainly palm oil) has jumped sharply to 23,53,764 tonnes during the first four month of the oil year (November 2008-October 2009) as compared to 14,41,380 tonnes in the corresponding period last year.