March 22: The edible oil industry associations are gearing up to make their suggestions for bridging the demand-supply gap to the new government at the Centre. The estimated gap for the country as a whole is about 18 lakh tonnes.KML Chhabra, executive director of the Central Organisation for Oil Industry and Trade (COOIT), told The Financial Express that the government should reorient its strategy and set different objectives for the Technology Mission on Oilseeds and Pulses (TMOP). The mission has completely failed in creating self-sufficiency in oilseeds, and the gains achieved are marginal.
Chhabra said the existing policy of the technology mission was to ensure area coverage and not increasing productivity. Expanding the area under oilseeds could ensure a rise of production only up to a certain extent. What was needed was to ensure the supply of adequate hybrid and certified seeds to farmers and encourage them to shift to these seeds by setting up more demonstration units.
Apart from these,irrigation facilities have to be ensured and fertilisers and other inputs supplied to farmers.
Going a step further, Chhabra advocated liberalised imports of oilseeds under open general licence (OGL) at a duty rate that would be much less than the 25 per cent rate (including surcharge) levied in the case of RBD palmolein oil. The duty structure should be so designed that the landed cost of imported edible oilseeds was not lower than the market price of indigenous seeds so that domestic growers were in no way adversely affected.
He argued that flexibility in the area of import policy on edible oils vis-a-vis oilseeds would help the solvent extractors and refiners to increase their capacity utilisation from the present level of 35 per cent.
The import of seeds can be against required quarantine measures without any unnecessary hurdles. IR Mehra, executive director, Indian Vanaspati Producers' Association (IVPA), suggests the import of crude palm oil by the vanaspati industry against a concessional dutyof 10 per cent. At present all crude oils of edible grade, barring coconut oil, RBD palm oil, RBD palm kernel oil and palm stearin, are imported under OGL against 20 per cent duty. Crude palm oil is a canalised item for import through STC and the Hindustan Vegetable Oil Corporation against 30 per cent duty.
Both Mehra and SK Chadha, executive director, Vanaspati Manufacturers' Association of India (VMAI), are of the view that the liberal policy of importing refined RBD palmolein from Malaysia, instead of crude palm oil, has discouraged the domestic industry and supported the industry in a foreign land.
If import of crude palm oil can be liberalised, it would provide a support base for domestic vanaspati industry to increase its capacity utilisation.Chadha argued for a reduction of duty on imported edible oils from 25 to 15 per cent as both domestic and global factors indicated a rise in market prices of edible oils by 15 to 20 per cent in the next six months. This was due to the shortfall in rapeseed andmustard seed output to 53 lakh tonnes in the country in 1997-98 and the steep increase in global prices for palmolein from $550 per tonne to $650 per tonne. Besides, Indonesia has banned any export of palm oil. Therefore, the lowering of import duty can help consumers obtain oil at fair market prices.
Mehra also expressed concern about imports of duty-free inferior quality edible oil from Nepal as per the protocol to the treaty of trade concluded between the two countries. In the realm of taxes and excise, all the associations demanded removal of excise duty on residues and byproducts like spent nickel catalyst, soap stock, oxygen, acid oil and fatty acids.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
