SEA of India has sent a memorandum dated 31st July 2018 to Suresh Prabhu, Minister of State for Commerce & Industry and other Ministries requesting for immediate action to check the huge import from SAFTA countries.
On March 1, Government increased duty on CPO from 33% to 48.4%. Subsequently, on 14th June, duty on soft oils was also increased to 38.5%.The move to hike import duties was undertaken by the Government to help farmers as it would provide support to domestic prices. Cheap imports through member countries are undermining the entire initiative of supporting the farmers as they have distorted domestic prices. This will in turn hurt domestic crops and farmers.
Some importers based at Haldia imported 10,000 tonnes of refined soybean oil (vessel name Bertina) and would be distributed not only in Eastern India but also to other states. One more vessel carrying huge quantity of refined soybean oil arriving at JNPT shortly. Also, a vessel at Chitagaon is under loading palmolein for Kandla/Mundra, will sail shortly. Due to huge margin, some traders are now trying to import through Sri Lanka under SAFTA at Nil duty. Earlier, import was mainly through boarder by road in small quantity but now coming in big way in vessel load by sea as flood gates have opened.
In summary, cheap imports of refined oils & Vanaspati from member countries are resulting in distorted domestic refined oil prices, leading to pressure on domestic crop prices and in turn hurting farmers' income. Government also stands to lose revenue which may run into crores. Indian refiners will also face severe pressure as refined products are being imported under zero duty at the cost of Indian refining industry.
It may be noted that the refined palmolein or soya oil are not products of SAFTA Countries. SEA therefore urge the Government to take immediate steps to check the imports by putting all edible oil products and Vanaspati on negative list of SAFTA treaty as soon as possible and in the meantime please fix up the edible oil wise/month wise quota and distribute among the various states / region to reduce the import pressure on any particular state/area as was done in the past to check the import of vanaspati from Sri Lanka.
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