India should impose 10 pc duty on palm oil imports: Analyst

NEW DELHI: India should consider imposing 10 per cent import duty on crude palm oil to protect interests of oilseed farmers, an analyst said today.

At present, there is zero import duty on crude palm oil and 7.5 per cent duty on refined oil. Palm oil constitutes about 80 per cent of the countyr's total vegetable oil imports.

"It is important for the Indian government to think in terms of some small protection, say a 10 per cent import duty on crude palm oil, to protect India's poor oilseed farmers," Godrej International Director Dorab E Mistry said at the golden jubilee convention of Central Organisation for Oil Industry & Trade (CCOIT) here.

Pointing out that oil palm cultivation in India has been a solitary success story in the last few years, he said, "Current crude plam oil (CPO) prices of Rs 40,000 per tonne are definitely not attractive and will discourage farmers from taking up oil palm cultivation."

"The domestic inflation will soon come under control. Once that happens, it will be necessary to levy a small import duty on unrefined vegetable oil imports," he explained.

Experts fear that India could increase its vegetable oil imports in 2012-13 in the wake of sluggish domestic production of oilseeds and take benefit of lower global price on the back of an expected record stock of palm oil in Malaysia and Indonesia in 2013.

On oilseeds production during the kharif season (June- September), Mistry said that oilseeds harvest in India has been better than what was expected until August. "Late rains have been a big blessing. At the same time, world prices of soybeans are very high and this should give a boost to farm incomes of soya farmers."

The country's edible oil imports is expected to be 10 million tonnes in the 2012-13 marketing year (November- October) in view of poor domestic output and high demand, according to industry experts.