Vanaspati intake from Sri Lanka up 10,000 mt

Vanaspati import from Sri Lanka during April 2005-July 05 has touched 55,000 mt (metric tonne), compared with 45,000 mt in the same period last year.

The import in the first 15 days of August 05 was 7,500 mt, said Indian Vanaspati Producers Association (IVPA).

The import from Sri Lanka is likely to go up further, as more production units are coming up in the country, facilitated by duty free imports to India. The installation of more units in addition to the already existing eight units, is likely to push the imports, said an IVPA executive.

The domestic vanaspati industry is on the brink of closure owing to the duty free imports from Sri Lanka in addition to what was already being imported from Nepal under the Free Trade Agreements (FTAs).

"The factories in neighbouring states, especially Nepal and Sri Lanka enjoy cost and competitive advantage of over Rs 13,000 and Rs 16,000 respectively per tonne. They import the raw materials at zero duty whereas the domestic industry pays 81.6 per cent for the same. So the vanaspati imported from Sri Lanka can be priced even below the cost of production at the domestic industry," he added.

The association has submitted the pre budget memorandum to the finance ministry divulging the problems.

"Though in the Union Budget 2005-06 some relief was given by way of removal of excise duty on vanaspati and refined oils, but still there are some critical problems facing the industry," he said.

IVPA has requested the government to raise the current customs duty on importing vanaspati from 30 per cent to 80-90 per cent.

"This will be a positive measure for the Indian industry and will generate additional revenue of over Rs 14,500 per tonne on imports from these two countries. The association asked to put vanaspati in the negative list in the existing FTAs with Sri Lanka and the other SAARC countries," he said.