Oil import violation under probe

The Centre has asked the customs department to probe whether edible oils were being imported under the non-edible category.

According to industry sources, import duty on non-edible oil works out to 39.83 per cent compared with 78.2 per cent for non-edible oil, inducing unscrupulous importers to save on duty by misdeclaration of goods.

The misdeclaration has resulted in a mismatch between the growth of edible and non-edible imports. Non-edible oil imports during the first 11 months of oil year 2006 (November-October) jumped by 63 per cent to 605,611 tonnes compared with 370,774 tonne in the same period last year.

Edible oil imports, however, during the aforementioned period slumped by about 20 per cent to 38,00,569 tonne from 46,55,486 tonne during the same period last year.

Crude edible oil imports during the first 11 months slumped to 37,80,112 tonne (46,30,483 tonne), while refined oil imports declined to 20,457 tonne (25,003 tonne) in the comparable period last year.

Vanaspati units are running soap units side-by-side and, therefore, non-edible oil imports, which is done for the purpose of using as a raw material for soap, is being converted into edible oil by simple processing with minute expenditure.

"This is hurting the edible oil industry industry at large and importers in particular very badly," said B V Mehta, executive director, The Solvent Extractors' Association of India.

Experts believe that a significant quantum of non-edible oil was being illegally diverted for adulteration of vanaspati, which is dangerous for health.

"The government has woken up late. We had demanded the government to prevent such malpractices by putting in strong regulations. I believe the edible oil importers would heave a sigh of relief with the government's latest step," Mehta said.

When palm fatty acid distillate (PFAD) and crude palm stearin (CPS) are neutralised in presence of strong alkali, the end result is a water-soluble sodium chloride of fatty acid - salt.

In contrast, when fatty acids are mixed with glycerine using a catalyst, the result is triglyceride or crude palm oil (CPO). CPO obtained here is of non-edible grade oil, with free fatty acid (FFA) content above 20 per cent.