The value of edible oil imported last year (1997-98) is placed at Rs 6,000 crore.

With the international prices for edible oils declining, this trend is likely to continue in the remaining part of the current year's oil year, feels Solvent Extractors' Association (SEA). ``The value of edible oil imports may cross Rs 7,000 crore this year.'' The annual demand-supply gap for edible oils is estimated to be around 12 to 14 lakh tonnes.

The surging edible oil imports have depressed the edible oil prices in the domestic markets. For example, the groundnut oil prices at Rs 39,200 per tonne is said to be almost 37 per cent lower from Rs 53,000 per tonne in October 1998; that of sunflower oil has dipped by 35 per cent to Rs 27,500 per tonne (from Rs 42,000 per tonne in lastOctober); RBD palmolein at Rs 28,300 per tonne is down by 31.7 per cent (from Rs 38,500 per tonne in October last) and refined soyabean oil at Rs 28,200 per tonne is down by 29.5 per cent (from Rs 40,000 per tonne).

This price trend is in line with edible oil prices prevailing in the international markets. Both the RBD palmolein and sunflower oil prices at $460 per tonne in mid-May have lost around $305 per tonne and $220 per tonne respectively from around $765 per tonne and $700 per tonne in last September last. In July last, the RBD palmolein prices however, were placed at $495 per tonne and $703 per tonne respectively. The soyabean oil at $440 per tonne has lost $235 per tonne from $875 per tonne in September last.

``It's high time the government corrected the inverted duty structure,'' says SEA president Ajay Tandon. In a note released on Saturday, Tandon said: The duty on oilseeds should be the lowest as these are raw materials for the edible oils, medium for crude edible oil and highest on refinedoils.Against this, currently, the duty on oilseeds is placed at 40 per cent, while on raw and refined oils it is 15 per cent.

The change in the import duty structure will achieve the objective of differential rate of duty to support domestic oilseed and crushing refining industry by having lower duty on raw material than finished products, Tandon said.

Further, SEA urged the government that the import of edible oils should be regulated in conformity with domestic production and demands. The government should also introduce the concept of variable duty structure and price bands of oils that is duty to be changed with the seasonal consideration that is lean and peak crushing season. If price falls below the level, duty could be increased and for higher level, duty may be decreased considering the international prices of edible oils, domestic supply and consumers' interest.