NEW DELHI: Soybean Processors Association of India (SOPA) has requested Finance Minister Arun Jaitley to increase customs duty on edible oil imports to protect domestic interests, farmers, with global prices at five-year lows.
The association pitched for an increase in customs duty to 25 percent on crude edible oil and 30 percent on refined varieties.
“Soybean industry and trade is greatly concerned at the burgeoning edible oil imports of over 11 million tonnes (mt) annually with an import over Rs. 65,000 crore … severely hurting the local producers and farmers,” said a note addressed to Jaitley, dated July 8.
Signed by the association’s Chairman Davish Jain, the note estimates soyabean imports to surge to 3 mt in the 2014-15 oil year, against domestic soya oil production of 1.6 mt. It urged the prioritisation of the sector in the ‘Make In India’ programme with edible oil consumption rising each year.
“India has become a dumping ground for cheap palm and soybean oil. Even when the government increases duties marginally, the exporting countries reduce their export duties or their prices to offset the duty increase,” the note alleged.
The Centre had raised import duty of crude and refined edible oil by 5 per cent each last December. However, price of soya oil slid 18.2 percent between January and July.
Soyabean meal exports fell 71.5 percent this year, from 2.05 mt in 2013-14 to 0.58 mt between October and June. Indian soyameal is quoting $200/tonne higher than competitors, such as Argentina and Brazil.
As of July 6, average local wholesale price of crude soyabean oil was Rs. 57,750/tonne ($911.67/tonne), while globally the commodity was pegged at $730/tonne.
“…this is directly affecting the farmers and industry who have to compete with cheap imported oil. Such low price of soybean oil is also hurting export of soybean meal, where India has become uncompetitive in the world market,” it added.
The association had earlier estimated soyabean acreage to rise 7-10 per cent this Kharif season due to the timely monsoon onset and sufficient rain across Madhya Pradesh, which accounts for the bulk of soyabean production in the country.
With most of the sowing completed in MP, there are concerns about rainfall, with parts of the State having gone dry over the last few weeks.
As per the India Meteorological Department’s latest monsoon update, rain in the Central region is 8 per cent below normal. Parts of Eastern MP are likely to get heavy rainfall over the next two days with the rest of the State also likely receive more precipitation by Saturday.
