Refined palm oil being imported as crude, allege traders

Refined palm oil was being imported from Malaysia and Indonesia on payment of lower import duty which was applicable to crude palm oil, some medium and small players in the industry alleged here today.

They said large importers were doing this to sell edible oils at a price cheaper by at least Rs 3 per kilogramme.

Crude palm oil attracted import duty at 65 per cent and refined palm oil at 75 per cent, up from 70 per cent before the last budget.

Small importers alleged the wrong type of oil was slipping in through JNPT, Mumbai and Bedi port in Jamnagar, and recently through Kandla.

Crude palm oil or palmolein should have acid value of two per cent or more and total carotenoid (as beta carotene) in the range of 500-2500 mg per kilogramme in loose or bulk form.

The carotenoid range has been prescribed on the basis of composition characteristics 2.6 of the Codex standard for vegetable oils.

The government adopted this standard from Codex Alimentarius Commission, set up under the UN Food and Agriculture Organisation and WHO. This standard was meant for voluntary applications by commercial partners and not for application by governments, said an importer.

Medium and small importers conformed to set standards for crude and refined edible oils, he added.

"Companies beat competition by bringing in crude palm oil at lower duty after finding ways to easily meet import norms. Paying lower duty allows players to cut cost by Rs 1.50 a kilogramme in vanaspati," Kaushik Khona, group chief financial officer and company secretary, Gujarat Ambuja Exports Ltd told Business Standard.

B R M Rao, CEO, Gokul Refineries and Solvents Ltd, however, denied the existence of the practice. Refiners had the best refining technology, and it made little sense to import refined crude oil at the price of crude palm oil, he said.

"I do not think that is happening," he said.