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Mumbai, Feb 2: The Central Organisation for Oil Industry and Trade (COOIT) has sought a hike in import duty on edible oils as the indigenous processing industry is reeling under a sharp fall in international edible oils prices.
According to the organisation, 20.8 lakh tonnes of edible oils have been imported during November 97-October 98 as against the demand supply gap of 14 lakh tonnes.
Further imports of 5.5 lakh tonnes have taken place as against the 1.75 lakh tonnes during the same period last year and imports are still continuing unabatedly.
The sharp rise in imports witnessed in the last few months has resulted in stock piling of imported oils. The country's kharif oilseeds crop is better than last year and further, a bumper rabi oilseeds crop is expected.
The rabi crops of rape and mustard alone could be over 65 lakh tonnes against 45 lakh tonnes. Thus the availability of edible oils is ample to meet country's requirements, COOIT has reasoned.
The unprecedented level of imports of edibleoils due to sharp fall in international prices of about $ 110 per tonne between October 98 and January 99 have impacted adversely forcing several units to shut down their operations as their viability is threatened.
COOIT has suggested a four-pronged approach to government for increase in import duty. The first suggestion is regarding increase in import duty on refined oils from 15 per cent to 35 per cent.
The other suggestions include lower duty on crude oils at 25 per cent so that the capacity utilisation of the indigenous processing industry.
Extension of exemption from special additional customs duty in respect of imported edible oils for usage by refineries along with vanaspati units is also sought to tide over the grim scenario.
Moreover exemption to traders from special additional customs duty in respect of imports of edible oils is sought to be withdrawn.
According to COOIT, the above proposals would not only help to prevent spread of sickness in the indigenous industry but also enablepayment of remunerative prices to farmers also. It has been suggested that a further review of the tariff structure can be made during lean season if circumstances warrant.
The current circumstances have forced oilseeds crushing and processing units to close down their operations due to heavy disparity and cash losses which has also resulted in large scale unemployment.
This would also have serious repercussion on the farmers as the industry would not be in a position to purchase the oilseeds at prices remunerative to farmer.
The Solvent Extractors' Association of India has also urged the union government to immediately raise the import duty to save the domestic industry from collapse.
According to SEA in January 1999 alone, the import is estimated at 2.00 lakh plus tonnes of edible oil.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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