Vanaspati manufacturers, apprehensive of a reimposition of duty on crude palm oil (CPO), have asked the government to desist from such a move as it could lead to an increase in the prices of cooking oil.
In a joint memorandum to Prime Minister Manmohan Singh, the Vanaspati Manufacturers’ Association (VMA) and the Indian Vanaspati Producers Association (IVPA) said that since prices of major oilseeds are ruling above their minimum support prices (MSPs), the situation does not warrant any hike in custom duty on crude palm oil, a major raw material in vanaspati-making.
The Centre, in April, had reduced import duty on refined oils to 7.5 per cent and abolished customs duty on crude edible oils. But recently, it reimposed a 20 per cent duty on crude soyabean oil while crude palm oil was untouched.
The Mumbai-based Solvent Extractors’ Association (SEA) had met Commerce Minister Kamal Nath last week to demand imposition of customs duty on CPO.
Vanaspati producers that said groundnut seed is ruling at Rs 2,250 a quintal at Saurashtra in Gujarat against its MSP of Rs 2,100 a quintal, while soyabean price is at Rs 1,800 a quintal compared to its MSP of Rs 1,390 a quintal.
CPO and other palm oils constitute 85 per cent of India’s import basket. The country buys over 6.3 million tonnes of vegetable oils a year.
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The vanaspati makers alleged that a section of the industry is demanding imposition of duty on CPO “to make speculative profits in the stocks of soyabean seeds and groundnut shells hoarded by them.”
They fear that re-imposition of duty would open the gates for cheaper vanaspati from Sri Lanka and Nepal, which may adversely affect domestic makers.
Vanaspati makers said groundnut oil has declined to Rs 61 a kg from Rs 65 in 2007 in the wholesale market while soyabean oil has come down to Rs 42.50 a kg from Rs 46.80.