Millers want govt to raise import duty on edible oil

RAJKOT: With ample rains raising the prospect of the market being flooded with oilseeds like groundnut and cotton, the oil millers of Gujarat want the government to increase import duty on edible oils and impose restrictions on the import of refined palmolein oil.
Oil millers fear that continued import of edible oil will adversely impact the domestic trade. The Gujarat State Edible Oils and Oil Seeds Association (GSEOOSA) on Friday addressed a letter to Prime Minister Narendra Modi raising their concerns.
With the prices of the edible oils hitting the roof, the central government had reduced import duties on the import of palm, soya and sunflower oil twice in 2021. The move was taken so as to bring the edible oil prices under control. The recent duty cut was announced this month.
In June the government also removed the restriction on the import of refined palm oil till December 31. India imports edible oil to meet 60% of its requirement. The palmolein oil is widely used for cooking purposes in restaurants and manufacturing of ‘namkeen’.
The availability of imported edible oil at low prices puts pressure on domestic manufacturers. On the other hand, if the price difference between imported oil and domestic groundnut and cotton oil is not much then many bulk consumers, like restaurant owners, prefer the former category.
In its letter to the PM, the GSEOOSA requested to raise the import duty. “We very well understand that these are political decisions (to reduce import duty) and were unwillingly taken by the government. But now, when a huge crop of oilseeds is about to hit the market, it is necessary to raise the duty on imported edible oils,” the letter states.
“The unrestricted import of refined palm oil is also harming the business of domestic refineries that used to import crude palm. The rain in September has changed the crop picture and we are expecting a good crop of groundnut and cotton,” said Samir Shah, president of GSEOOSA, said.
The oil millers are also expecting that the market price of groundnut will remain low against the minimum support price. The government will procure around 33% of the crop but the rest will come into the market directly.