Promote mustard to cut edible oil imports

Ritwik Mukherjee Finance minister Arun Jaitley on Thursday raised the import duty on crude edible oils from 12.5 per cent to 30 per cent and on refined oils from 20 per cent to 35 per cent. The move, which was in line with recommendations by several trade bodies, is expected to give a boost to the domestic crushing industry, in particular, and the overall edible oil sector, in general. While there has been no specific benefit to the edible oil sector, the finance minister hiked the import duty on crude cottonseed oil to 30 per cent from 12.5 per cent, crude palm oil (CPO) 33 per cent from 30.9 per cent, RBD (refined, bleached and deodorised) palmolein 44 per cent from 41.2 per cent. The import duty on refined cottonseed oil has been raised to 35 per cent from 20 per cent. Like all other sectors, there were excitements, optimism and disappointments, simultaneously, in the segment. “Increase the import duty on edible oils is a good move. As a domestic manufacturer, we have been raising the demand for quite some time. A vision and a plan are needed for the industry. It will encourage farmers to focus and produce more domestic oilseed crops like mustard, and benefit agriculturists, consumers and manufacturers,” said Vivek Puri, managing director of Puri Oil Mills. “Indian mustard oil has the potential to reduce imports of edible oil and can save foreign exchange. What palm oil is for Malaysia, olive oil for Italy and soya oil for America, mustard oil can be for India. We request the central government to establish a mustard oil development board for the integrated development of the mustard oil industry, with focus on higher productivity and value addition,” Puri said. We have been demanding an edible oil development board for some time, said Atul Chaturvedi, president, Solvent Extractors’ Association (SEA) of India. “Most of our recommendations were accepted, but for a few demands like increasing the duty differential between crude palm oil and RBD palmolein at 15 per cent. We had also demanded setting up of an oilseed development fund from revenues of increased duties to ensure edible oil security. But it was not there in the budget,” Chaturvedi said. Davish Jain, chairman, Soyabean Producers Ass­o­c­iation (SPA) of India ech­oed the disappointment. “Our request for an oilseed development fund has not been accepted although it’s an import-intensive commodity,” said Jain. India’s edible oil imports declined to 10 per cent on year to 1.06 million tonnes in December, according SEA data. At the same time, India exported 32,832 tonnes of oil meal, up from 2,292 tonnes a year ago. In case of mustard, the second most important oilseed crop after groundnut and also most important winter oilseed crop in India, production in Rajasthan alone was seen falling 16 per cent on year to 3.2 million tonnes. Farmers have sown mustard crop over 6.6 million hectares, down 5 per cent from the same period last year, as per the agriculture ministry statistics. India needs to import over 15 million tonnes of edible oil each year to fill the demand-supply gap, making it the world’s largest importer of the commodity. These imports mainly comprise palm oil from Malaysia and Indonesia, and soybean oil from Brazil and Argentina. “The Centre should treat mustard as a national crop and go ahead with certain policy changes, which could encourage farmers to focus on mustard as a cash crop, increase the area under cultivation, reduce the domestic demand-supply gap by increasing the production of mustard oil, and thus reducing imports. Moreover, since mustard is inherently and historically an Indian product, such policies would dovetail seamlessly with the Centre’s ‘make in India’ initiative,” said Puri.

Ritwik Mukherjee