On crude palm oil import in India, to decrease in the import duty The Indian edible oil refiners have requested t the govt. As imports of refined products are increasing exponentially, the domestic industry needs support to compete.
For safeguarding of their domestic industry, the countries exporting Palm Oil charge a 12% and 5% on crude and on refined oil respectively. The Indian Refiners said- the local import duty becomes costly for them. As per BV Mehta who is the association’s executive ¬director said that The reduced price of crude oil will not affect the government’s agenda of checking inflation as the prices of edible oil will not be impacted.
Mr Mehta also said that in comparison to last year with a slight increase expected in a festival season. Because of increase in imports of refined palm oil, the Domestic industry is stressed.
As per Mr Mehta, in 2012-2013, imported refined oil share was 20%, in 2014, it was 18% and now refined oil share has reached 32% of the total import. Crude palm importing from the refineries are barely managing to recover the variable cost. All such things like interest on capital expenditure, the entire fixed cost, depreciation and profit are left uncovered. No refinery can sustain or survive In such circumstances; said, Mr Mehta.
If the crude palm oil import rises, then Increase in by-products will also be seen. Like palm stearin and palm fatty acid distillate is known as the by-products and for of the chemical and soap industry, these are used as main ingredients. In the vanaspati, bakery shortenings and margarine manufacture, some of the by-products are also used.
On palm stearin and palm fatty acid distillate, the import duty was reduced to nil in the last budget, said by an industrialist. The duty differential between crude and refined oil was retained at 7.5%, as the import duty on these by-products was made nil. Hence, making the refining route of crude more expensive than direct import of refined palm oil.”