Edible oil imports double on duty fears

NEW DELHI: India���s edible oil import more than doubled in December 2008 over the year-ago period as traders are buying on a large scale on apprehension that the government may impose import duty on crude palm oil.

According to an industry estimate, edible oil import last month shot up by 160% to 719,125 tonne from 276,782 tonne in the corresponding period in 2007.

"The import of edible oil increased sharply due to a sharp drop in international prices and anticipation of import duty by the government," an industry expert said. Releasing the edible oil import data, Solvent Extractors Association (SEA) said edible oil import in first two months of the current oil year November-October has nearly doubled to 12,38,157 tonne from 6,24,102 tonne in the year-ago period.

A section of the edible oil industry has been demanding that duty be imposed on the import of such oil, following a slump in the prices in overseas markets. This will safeguard the interests of domestic industry, as well as that of farmers, who
would otherwise be a victim of cheaper imports.

The government had in November last year levied 20% duty on crude soyaoil. The industry expressed its disappointment saying the duty should rather have been levied on crude palm oil which accounts for about 85% of India���s edible oil import.

As part of its move to contain rising inflation, the government had in April last year scrapped import duty on crude edible oil, while the duty on refined oil was reduced to 7.5%.

India imported a record 5.6 million tonne of edible oil in the 2007-08 season to meet domestic demand estimated to surge to nearly 13.3 million tonne in 2008-09 from 11.8 million tonne in 2005-06.