Chennai , March 8 - THE Union Government is considering a review of itsdecision to cut the tariff value of imported crude soyabean oil to $485 atonne from $565. It is likely to hike the value in tune with theprevailing global prices, according to sources.
The move follows protests from various bodies of the edible oil industry,the sources said. These associations had lodged the protest with theFinance as well as the Commerce Ministry, saying it could affect them aswell as the farmers. The tariff value is the base price on which thecustoms authorities compute the import duty. For crude soyabean oil, theduty is 45 per cent. The Government had announced the cut in the tariff onMarch 1.
On February 15, tariff values were reduced for the entire palm oilcomplex, comprising crude palm oil (from $454 a tonne to $400), RBD orrefined, bleached, de-odourised palm oil (from $489 to $415), `others-palmoil' (from $471 to $410), crude palmolein (from $479 to $412), RBDpalmolein (from $497 to $425) and `others-palmolein' (from $488 to $420).The bodies, primarily the Solvent Extractors Association of India andSoyabean Processors Association of India, had expressed concern over thefact that the cut in the tariff value had come at a time when arrivals ofthe rabi oilseeds crop, especially mustard/rapeseed, had begun.
"Not only that, the tariff value announced is far lower than theprevailing market price. We are told that the recommendation had gone tothe Finance Ministry a month ago before the actual notification wasissued. Even then, the global prices were higher. There is nojustification for announcing such a low tariff value," an official of theSolvent Extractors Association said.
Crude soyabean oil is quoted at $505.30 (Rs 22,075) a tonne f.o.b forMarch delivery, while for May delivery it is $500 (Rs 21,850).
"Including freight, it will easily be over $560 (Rs 25,000) a tonne. Evenin February, it would have been about $530," the official said. Currently,soyabean oil in the domestic market is quoted at Rs 375.80 for 10 kg.
Soyabean prices, which had been ruling low until the start of February,have begun to gain on reports of fall in Brazilian crop. The soyabean cropin Brazil is expected to be 55 million tonnes, lower than initialestimates of 61 million tonnes due to drought.
"One effect of the lower tariff value will be that the oilseeds crop thatis arriving in the market now could get lower prices. We don't want thefarmers to get a price lower than the minimum support price fixed by theCentre," the official said.
Currently, mustard is quoting a little lower than the minimum supportprice of Rs 1,700 a quintal, though it has recovered from the low of Rs1,450 it hit a couple of weeks ago.
"The industry is keen on the farmers getting the support price as itensures that they will continue to cultivate oilseeds. It will reduce thecountry's dependence on edible oil imports but more importantly, it willensure the solvent industries supply of raw material," the official said.
With the farmers' angle coming into play, the Centre was expected toannounce a hike in the rate soon, sources said.