SEA advocates zero import duty on soybean, sunflower oil till September instead of TRQ system
Stating that the Tariff Rate Quota (TRQ) for import of crude soybean and sunflower oils may hamper smooth supply chain of edible oils, industry body SEA on Thursday demanded that the government, instead of implementing the TRQ system, Make the import duty on both of them zero. Main cooking oil until September.
TRQ is a quota for import quantities that will enter India at specified or zero duty, but once the quota is reached, the normal tariff is applied to additional imports.
On May 24, the government had notified the TRQ of 20 lakh metric tonnes of crude soybean oil and crude sunflower oil for 2022-23 and 2023-24.
Atul Chaturvedi, president of Mumbai-based Solvent Extractors Association of India (SEA), said in a letter, “The intention of the government to introduce TRQ is to help increase supply and reduce prices in the country, but it may reduce imports.” ” Food Secretary Sudhanshu Pandey
The real impact of TRQ in the market will be felt only after 2-3 months of its implementation. He said that in the intervening period, prices of edible oils are likely to rise as the festive season in India begins soon and consumption picks up as soon as the rains begin.
“To have an immediate effect, it may be worthwhile to reduce the duty on these oils immediately to achieve the desired objective,” he said.
Chaturvedi also said that the government is binding itself by issuing TRQ of 4 million tonnes of soybean and sunflower oil. “If there is a fall in the prices in the international market, we will find it difficult to increase the import duty and this may affect the prices of domestic oilseeds,” he said.
Against this background, the SEA chairman suggested that the government may reduce the import duty on both these edible oils to zero till September instead of issuing TRQ.
“This will have a beneficial effect on domestic edible oil prices. The government may review the situation in September and take a decision on suitable demand for oilseeds production in Kharif.
He also said that global oil prices are under pressure and Indonesia has also been forced to issue export licenses as their storage tanks are full. If the government lowers the import duty only on soybean and sunflower oil, it will ensure that palm oil prices move south and affect the entire edible oil complex in India.
India is dependent on imports of edible oil to meet more than 60 per cent of its domestic demand. In the last few months, the government has taken some steps like progressively reducing the import duty to keep food prices under control.