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Solvent extraction units seek aid for survival
Our Commodities Bureau
Chennai, Nov 12: The deepening crisis in the edible oils sector is directly hitting over 500 solvent extraction units in the country. Owing to dwindling domestic production, lack of sufficient oilseeds and other oil bearing materials for extraction, excess supply of cheap imported oils in the market, the solvent extraction units are operating below 40 per cent capacity. Many units have closed and many more are on the verge of closure, according to Mr Sandeep Bajoria, president of the Solvent Extractor's Association of India (SEA). He was addressing the members of the association at its the all India convention of oilseed, oil industry and trade held in Chennai.Increase in import duty, raising productivity and permission to import oilseeds are the measures suggested for improving the state of affairs of the industry. The SEA proposals to revive the industry are: Increasing productivity of oilseeds, which is stagnant at around 21-22 million tonnes since 1993-94 and the yield around 800-850 kgs per hectare. It is only 60 per cent of the world average and 35 per cent of western world levels. (Tamil Nadu is an exception with an average groundnut yield of 1649 kg a hectare). The national productivity levels have to touch at least 1000/1100 kg per hectare in the next three years. The Union agriculture ministry is asked to identify the reasons for stagnancy and draw up a blue print for increasing the oilseeds yield and suggest long term and short term policy measures/changes and practical solutions to enhance the production of oilseeds in the country. High-yielding seed varieties, right fertiliser dosages, better irrigational facilities, better harvesting machines, control of post harvest losses, crop insurance etc., should be brought in to practice to increase productivity standards. Regulate excess import in conformity with domestic price, production and demand through variable tariff mechanism. If prices fall below the reasonable level, duty could be increased and vice versa keeping in mind the international prices of edible oils, domestic supply situation, minimum support prices and interest of the consumers. The government has to raise the tariff to maximum permissible limit of 45 per cent to 100 per cent. Oilseeds & Oil Development Fund should be set up by the government and the additional revenue generated by increased import duty, to be utilised for the purpose of increasing the oilseed yield in the farm, and soft loan for technology upgradation and packaging to the oilseeds sector.Indigenous oil use in vanaspati recommended by the ministry of consumer affairs and public distribution, had made it obligatory for vanaspati manufacturers to use at least 25 per cent of the indigenous oil in manufacture of vanaspati since June, 2000. However, there has been no significant increase, in the last three months, in the offtake of solvent extracted oils by vanaspati units despite higher vanaspati production. The government has to make it manadatory for vanaspati manufacturers to use more domestic vegetable oils for their production needs during the peak season to save the local solvent extraction units.Encourage domestic production of industrial (soapery) oils because the utilisation of domestic industrial oils has been affected on account of the de-canalisation of fatty acids, acid oils, crude palm stearin and soap stock and progressive reduction of import duty from 150 per cent to 35 per cent in the Union Budgets coupled with the fall in international price of industrial oils over the years. This has encouraged larger import of soapery oil and it is estimated that over 2.0 lakh tonnes is getting into the country per annum. This has discouraged the solvent extraction units producing non edible rice bran oil and minor oils, as the processing has become loss making due to cheaper availability of substitutable industrial oils.The country has large untapped potential and unutilised processing capacity to produce sufficient industrial oils to meet the indigenous demand for soap and other industries. The government should make it obligatory for organised soap makers to use certain minimum percentages of indigenous oils in soap manufacturing, as has been done in the case of indigenous oil utilisation in vanaspati manufacturing. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
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