Oil trade happy with incentives

The vegetable oils and oilseeds industry has welcomed the finance minister's initiatives in the budget to give an impetus to the sector.

According to D P Khandelia, president, Solvent Extractors' Association of India (SEA), "The finance minister's steps to encourage diversification of land from other crops to oilseeds in order to raise its production is a welcome move. This would reduce dependence on import of edible oils."

He lauded the move to reduce excise duty on raw material for processing like food grade hexane, used in the refining of Soya oil, from 32 per cent to 16 per cent. This would bring it at par with other petroleum products.

"The move will give some relief to the agro-based solvent extraction industry for reducing the cost of processing and thereby would boost our competitiveness in the world market for export of de-oiled meals," he said.

The industry is also upbeat on the decision of the government to raise the import duty on RBD palmolein to 70 per cent to 75 per cent while maintaining the import duty of crude palm oil at 65 per cent.

SEA however, pointed out that the issue of carotene content in Crude Palm Oil (CPO) has not been addressed and the benefit of duty difference may not accrue to the domestic refiners of vegetable oils but may affect the genuine importers and refiners adversely.

The industry is unhappy about the retention of excise duty of Rs 1000 per tonne on refined edible oil.

"It would have given some relief to the consumers and at the same time level playing field to the entire vegetable oil industry," said Khandelia.