Sopa seeks review of 45 per cent duty on soyoil import

With a surge in cheaper edible oil imports hurting domestic industry, the Soybean Processors Association of India (Sopa) has called for a review of the 45 per cent customs duty on import of soyoil, agreed under the World Trade Organisation (WTO) agreement.

In a meeting with Prime Minister Manmohan Singh, Sopa chairman Rajesh Agrawal said, "A review of duty is required, specially when the bound rate for other edible oils, under WTO stands at 300 per cent."

Agrawal said the domestic edible oil sector has been getting a raw deal owing to unfair competition from cheaper imports, resulting falling growth in oilseed cultivation.

Firstly, import of vanaspati - a finished product - is allowed at 30 per cent Custom duty, when the tariff on other edible oils used as raw material by vanaspati manufacturers like crude palm oil, is 80-85 per cent. This has led to a rise in vanaspati imports while making domestic units unviable.

Secondly, imports of edible oils/vanaspati from Saarc countries is allowed without Customs duty under the Saarc treaty, following which Nepal and Sri Lanka export about 2.5-3.5 lakh tonne of oils to India.

And lastly, the ministry of finance changes the tariff value on import duty of edible oils from time-to-time.

However, an absence transparency in the system saw speculators manipulate the futures market, affecting small players.

Agrawal expressed hope that the Prime Minister would take immediate measures to remedy the situation, which was becoming increasingly untenable for the oilseed farmers and the edible oil industry alike.