Further, many units are unable to utilise their existing capacity mainly suffering from severe price disparity in oilseeds and the end product. The issue poses an economical threat, and if not addressed, it may turn into a crisis, millers say.

During the last few months, at least 40 per cent of oil mills have downed their shutters, while others may meet the same fate if the price disparity continues.

Heavy inflow of imported oils has depressed local edible oil prices, resulting in severe price disparity. For instance if a mill buys rapeseed at Rs 225 per 20 kg, it can achieve break even only if it is able to sell edible oil at Rs 300 for 10 kg. But because of flooding imports, price for edible oil is currently ruling low at Rs 280. Thus, baring few like groundnutoil, most other oils are being sold at below the break even points.

The farmers who had fetched Rs 225 per 10 kg last year, are unwilling to offer their produce at lower than that prices this year. If farmers do not get remunerative prices, they may diversify into other crops, eventually this will decrease our self-sufficiency in oilseeds production, warned Prabhudas Patel, a leading oil miller of Ahmedabad.

"Though the mustardseed arrival is currently in full swing, millers are unable to operate even at half their capacity", Patel said.

Margins were already wafer thin due to competition. The illegal trade, known as a `Super' has worsened the business conditions. Seed attracts four per cent purchase tax, while oil attracts two per cent tax. The buyers who purchase seeds have to pay 2.5 per cent market cess and other charges.

Hence, the up-front cost comes at 6.5 per cent.

Those millers, who buy seeds on a cash basis to evade taxes can save up to 6.5 percent, thus make their production competitive.If government will not address the issue, the industry will perish, said Deepak Patel, another oil miller.

"As far as imports are concerned, the new exim policy is a fresh blow to the beleaguered seed crushing industry. The government has further liberalised imports. It has failed to resolve long standing demand of free import of seeds.

The global edible oil trade is flooded with surplus of around one billion tonnes. Couple with silence on the part of the Indian government, the global players are merrily dumping oil in the country.

India has already imported 15 lakh tonnes of edible oils during the last four months against last year's 2 lakh tonnes during the same period. Major oil producing countries are dumping their surplus, there may be a planned conspiracy by some powerful oilproducing country's lobby may be active, alleged Patel.

"The new exim policy is a fresh blow to the beleaguered oil processing industry. Instead of addressing the industry's long standing demand of freeing import of oilseedand restrictions on oil imports, the government has liberalised oil imports. The step would prove disastrous," he said.The government should introduce variable duty on import of edible oils. The duty should be flexible. In the peak season it should be on higher side to protect domestic units, while in the lean period duty should be reduced, such policy will protect interest of millers and consumers.

"There is a planned conspiracy. Multinational corporations are dumping various agro products like palmolein, soybean, pulses, sugar etc. They want to demolish local producers," asserts Arvind Pujara, a small time trader of Bhabhar, the nerve centre of castorseed future. Said Pujara: "The government must protect farmers who produce oilseeds, cotton, wheat and potato. There is huge supply of these commodities. It should reintroduce higher import duty on pulses and edible oils."