Edible oil makers want higher duty on imported palm
In a letter to food and consumer affairs minister Sharad Pawar on December 19, the Central Organisation for Oil Trade and Industry (COOIT) has demanded the government further raise Customs duty.
By Nidhi Nath Srinivas, TNN |
NEW DELHI: CONSUMERS have been paying 10% to 25% more than what they paid last year for cooking oils. However, at the first sign of a dip in prices, the cooking oil industry has asked the government to raise Customs duty on imported oils so thet the bullish trend in the local market continues.
In a letter to food and consumer affairs minister Sharad Pawar on December 19, the Central Organisation for Oil Trade and Industry (COOIT) has demanded the government further raise Customs duty.
“Edible oil prices in the international markets have been falling, which has a direct bearing on oilseed and oil prices here... Prices have come down during the last one month. From this, you will find that there is no justification for reduction in Customs duty now,” the industry body has stated.
“We earnestly request the government that there should be no reduction in Customs duties on palm oil and the duties should, in fact, be brought back to the level prevailing in August last, i.e.- 80% for crude and 90% for refined palm oil,” it has added.
Though COOIT has compared prices between November 21 and December 19, these may not be sufficient to get the complete picture. According to the department of agriculture’s inflation watch data, as on December 7, retail groundnut oil prices were significantly up by Rs 2 per litre in just one week, Rs 3 in a fortnight, and almost 10% more expensive compared to the same week in 2005.
Mustard oil has risen even more sharply by Rs 5 a litre in one month and by 16% over the past year. Vanaspati, which is manufactured through crude palm oil and consumed mainly in the semi-urban and rural areas, is dearer by Rs 10/kg, or 21%, compared to last year.
Pleading the case of farmers and Nafed, COOIT has argued that if duties are not raised, they may not get a remunerative price for oilseeds. However, given the current volatile price scenario, it may be too early to make a case for raising Customs duty. COOIT has said if the government reduced duties further, it would be helping Malaysian and Indonesian palm oil plantations. “It has always been seen in the past that whenever Customs duties are reduced in India, palm oil exporting countries raise their prices, offsetting the benefit of duty cut,” it has stated.
In a letter to food and consumer affairs minister Sharad Pawar on December 19, the Central Organisation for Oil Trade and Industry (COOIT) has demanded the government further raise Customs duty.
“Edible oil prices in the international markets have been falling, which has a direct bearing on oilseed and oil prices here... Prices have come down during the last one month. From this, you will find that there is no justification for reduction in Customs duty now,” the industry body has stated.
“We earnestly request the government that there should be no reduction in Customs duties on palm oil and the duties should, in fact, be brought back to the level prevailing in August last, i.e.- 80% for crude and 90% for refined palm oil,” it has added.
Though COOIT has compared prices between November 21 and December 19, these may not be sufficient to get the complete picture. According to the department of agriculture’s inflation watch data, as on December 7, retail groundnut oil prices were significantly up by Rs 2 per litre in just one week, Rs 3 in a fortnight, and almost 10% more expensive compared to the same week in 2005.
Mustard oil has risen even more sharply by Rs 5 a litre in one month and by 16% over the past year. Vanaspati, which is manufactured through crude palm oil and consumed mainly in the semi-urban and rural areas, is dearer by Rs 10/kg, or 21%, compared to last year.
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Pleading the case of farmers and Nafed, COOIT has argued that if duties are not raised, they may not get a remunerative price for oilseeds. However, given the current volatile price scenario, it may be too early to make a case for raising Customs duty. COOIT has said if the government reduced duties further, it would be helping Malaysian and Indonesian palm oil plantations. “It has always been seen in the past that whenever Customs duties are reduced in India, palm oil exporting countries raise their prices, offsetting the benefit of duty cut,” it has stated.
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