Cheap oil imports hurting Domestic interests

The cheap imports of refined oils and vanaspati from member countries are resulting in distorted domestic refined oil prices, leading to pressure on domestic crop prices and in turn hurting farmers’ income.

The Government also stands to lose revenue which may run into crores of rupees, adding that Indian refiners will also face severe pressure as refined products are being imported under zero duty at the cost of Indian refining industry.

The Solvent Extractors Association of India (SEA) in a representation to the Suresh Prabhu, Minister of State for Commerce & Industry, has stated that they would like to draw his attention towards the recent trend of importing refined edible oil and vanaspati to India at cheaper prices from neighboring countries which is hurting domestic farmers and industry.

In view of this, SEA is following up this issue and has once again sent a memorandum to Minister, requesting for immediate action to check the huge import from SAFTA countries such as Sri Lanka, Nepal, Bangladesh & Bhutan with nil import duty.

“On March 1, Government increased duty on CPO from 33 percent to 48.4 percent. Subsequently, on June 14, duty on soft oils was also increased to 38.5 percent. The move to hike import duties was undertaken by the government to help farmers as it would provide support to domestic prices.

“Cheaper imports through member countries are undermining the entire initiative of supporting the farmers as they have distorted domestic prices. This will, in turn, hurt domestic crops and farmers,” said B V Mehta, Executive Director of SEA.

“We understand last week some importers based at Haldia imported 10,000 tonnes of refined soybean oil (vessel name Bertina) and it would disturb not only eastern India but also other states. We further understand one more vessel carrying huge quantity of refined soybean oil is arriving at JNPT shortly. Also, a vessel at Chicagoan, under loading palmolein for Kandla/Mundra, will sail shortly. Due to the huge margin, some traders are now trying to import through Sri Lanka under SAFTA at nil duty.