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| The stipulation of an unrealistic minimum carotenoid content for imported crude palm oil has played havoc with the domestic vegetable oil refining sector, leading to sickness or closer to many oil processing units.
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| It has made the import of crude palm oil difficult, leading to a surge in arrival of exotic RBD (refined, bleached and deodorised) palmolein to the detriment of the local industry, according to the Indian Vegetable Oil Processors Association (IVOPA).
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| In a memorandum sent to the finance ministry, the IVOPA has categorically stated the stipulation of minimum 500 parts per million (PPM) carotenoid (carotene) content is impossible to meet.
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| This is because very small quantity of crude palm oil meeting this norm is available in the international market. Besides, carotene content drops further during transit from Malaysia and Indonesia because of degeneration, making it almost impossible to show 500 ppm carotenoid content at the landing ports.
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| IVOPA executive director D N Pathak said the Association had made a presentation on this issue to the revenue secretary on August 11 last but no action had ensued so far. The IVOPA has now written to finance minister Jaswant Singh to bring the matter to his notice.
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| He said the results of a study done by the Delhi-based Shriram Institute of Industrial Research, showing that the carotenoid content in crude palm oil fell from 409 ppm to 310 ppm after 10 days storage, had been conveyed to the minister.
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| Elaborating on the consequences of the official move to put 5 per cent additional import duty on crude palm oil having less than 500 ppm carotenoid, Pathak said the import of RBD palm oil, which was nil in April 2003, had already crossed 2 lakh tonnes by September.
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| This had pushed the domestic refining industry, having an investment of over Rs 3000 crores, to the brink of sickness.
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| He said the crude palm oil importers were facing problem also because the tests done at different ports showed different results because of variation in the testing methodology.
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| This was leading to the practice of under-invoicing by some importers to avoid payment of higher import duty.
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| The new norms had also prompted some importers to bring industrial grade crude palm oil which has a duty of only 30 per cent and 4 per cent special additional duty, against edible grade oil carrying 65 per cent duty.
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| The IVOPA has, consequently, urged the finance minister to either remove the carotenoid norm or change it to 300 ppm.
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| Besides, it has suggested that tariff value should be fixed for crude palm oil and crude palmolein consignments which did not meet the quality specifications.
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| The import of industrial grade crude palm oil should be made actual user-specific and the duty on it should be brought at par with that of edible grade crude palm oil, it has demanded.
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| The memorandum has said that the industry wanted to work in a fair and transparent manner in the interest of the consumers but the government policy was making it difficult to do so. |
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