Cheap Veg Oil import likely to hit domestic refined oil price
Cheap imports of Refined Oils and vanaspati from South Asian Free Trade Area (Safta) member countries are resulting in distorted domestic refined oil prices, leading to pressure on crop prices and in turn hurting farmers’ income. The government also stands to lose revenue.
The rising share of Vegetable Oil import from neighbouring countries, which are not known to produce any, has irked Edible Oil producers. Therefore Oilseed processors have urge the government to take immediate steps to check their import.
Over the past two months, soft oil (Soybean, Sunflower and Rapeseed/Mustard) is being imported in large quantity from Bangladesh, Sri Lanka, Nepal and Bhutan at zero duty under the Safta. This is in contrast to the traditional import of palm oil (Crude Palm Oil or CPO and Refined Oil or RBD) directly from Indonesia and Malaysia.
Data from the SEA show the import of soft oil in May and June had risen to 60 per cent and 52 per cent, respectively, of total Vegetable Oil import of 1.25 million tonnes (MT) and 1.01 MT, respectively. In earlier months, the average share of soft oil in total Vegetable Oil import was 32-33 per cent.
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