Edible oil exporters’ plans go haywire as ban disrupts contracts, inventory
The government may have banned export of vegetable oils with the intention of preventing any further dent in cooking oil supply but the overnight ban, coming into effect from March 17, comes as a rude shock to many exporters who have signed export...
By Ratna Ganguli, TNN |
KOLKATA: The government may have banned export of vegetable oils with the intention of preventing any further dent in cooking oil supply but the overnight ban, coming into effect from March 17, comes as a rude shock to many exporters who have signed export contracts for delivery by the year-end. The ban has shaken particularly those who even had their shipping bills cleared for outbound edible oil cargoes.
The abrupt ban on edible oils exports goes ultra vires to the provision under para 1.5 of the government���s Foreign Trade Policy (2004-09), which stresses fulfilment of overseas contracts by exporters, according to Indian Oilseeds & Produce Exporters��� Association (IOPEA) chairman Sanjay Shah. Consequently, exporters who have signed contracts for delivery within a year stand to lose credibility in the world, besides incurring heavy losses in terms of stocks awaiting shipments, he added.
India has been exporting about 15,000 tonne of sesame oil, 40,000 tonne of groundnut oil and another 8,000-10,000 tonne of vegetable oil from tree-borne oilseed over the past few years. Together, they constitute less than 1% of the country���s edible oil consumption at the current level of 130 lakh tonne. ���So, it is highly unlikely that the export ban will help softening edible oil prices in the domestic market,��� said Solvent Extractors��� Association of India (SEA) president Ashok Sethia.
According to him, the export ban will badly hit the state oil economy, which largely produces sesame oilseed. Cultivation will now take a beating, having improved substantially in recent times at the initiative of the edible processing units-cum-exporters.
Exported edible oils are of premium quality and high-value items. Prior to the ban, premium quality groundnut oil was being exported from India at an freight on board price of nearly $1,800 per tonne. Indian sesame seed, safflower and coconut oils have been fetching between $2,500 and $1,800 per tonne in the world. These are not for mass consumption, according to IOPEA.
Cocoa butter exports also come to a stop from March 17. Cocoa butter, made from sal seed oil, is used in the making of chocolates and certain confectionery items. As the government does not allow use of the domestically produced cocoa butter, vegetable fat producers entirely depend on export markets.
���Since this is made from sal seed oil, export ban on cocoa butter will also hit many tribals, who make their living through collecting sal seeds from forests,��� said Mr Sethia. Against this backdrop, SEA wants the government to lift the export ban on those oil plus non-conventional cooking medium like rice bran oil which fetch good prices in the global market.
The abrupt ban on edible oils exports goes ultra vires to the provision under para 1.5 of the government���s Foreign Trade Policy (2004-09), which stresses fulfilment of overseas contracts by exporters, according to Indian Oilseeds & Produce Exporters��� Association (IOPEA) chairman Sanjay Shah. Consequently, exporters who have signed contracts for delivery within a year stand to lose credibility in the world, besides incurring heavy losses in terms of stocks awaiting shipments, he added.
India has been exporting about 15,000 tonne of sesame oil, 40,000 tonne of groundnut oil and another 8,000-10,000 tonne of vegetable oil from tree-borne oilseed over the past few years. Together, they constitute less than 1% of the country���s edible oil consumption at the current level of 130 lakh tonne. ���So, it is highly unlikely that the export ban will help softening edible oil prices in the domestic market,��� said Solvent Extractors��� Association of India (SEA) president Ashok Sethia.
According to him, the export ban will badly hit the state oil economy, which largely produces sesame oilseed. Cultivation will now take a beating, having improved substantially in recent times at the initiative of the edible processing units-cum-exporters.
Exported edible oils are of premium quality and high-value items. Prior to the ban, premium quality groundnut oil was being exported from India at an freight on board price of nearly $1,800 per tonne. Indian sesame seed, safflower and coconut oils have been fetching between $2,500 and $1,800 per tonne in the world. These are not for mass consumption, according to IOPEA.
Cocoa butter exports also come to a stop from March 17. Cocoa butter, made from sal seed oil, is used in the making of chocolates and certain confectionery items. As the government does not allow use of the domestically produced cocoa butter, vegetable fat producers entirely depend on export markets.
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���Since this is made from sal seed oil, export ban on cocoa butter will also hit many tribals, who make their living through collecting sal seeds from forests,��� said Mr Sethia. Against this backdrop, SEA wants the government to lift the export ban on those oil plus non-conventional cooking medium like rice bran oil which fetch good prices in the global market.
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