2/18/2003 (Financial Express) - The consumer affairs ministry has made acase for reduction of customs duty on crude and refined edible oil in viewof shortfall in production of oilseeds on account of drought during theyear. According to sources, the ministry, in communication to the financeministry, said that reduction of duty was necessary to keep the prices ofedible oil under control in the domestic market. As per the secondadvanced estimate of crop production released by the agriculture ministry,the oilseeds output was badly hit as a result of drought.According to estimates, the oilseeds production in 2002-03 is estimated tofall by almost 25 per cent to 15.44 million tonne, which is the lowestsince `pre-technology mission' of 12.65 million tonne in 1987-88. Besides,the ministry has also suggested reduction of duty on the import ofoilseeds, which is currently at 30 per cent. This will help refineriescontinue crushing operations. Currently the duty on import of edible oilvaries from 45 per cent on soy oil to 65 per cent on crude palm oil (CPO)and 92.4 per cent on RBD palmolein.The sources in the ministry further added that duty reduction was alsoimportant to prevent instability in prices that occur due to a sharp risein prices in the international market that is a frequent occurrance. Thereis a distinct possibility of sharp price rise in the coming year due to adrop in production of soyabean in the US.Though the import of refined oil in the last year has nearly come to astandstill due to high import duty in the last budget, there is asuggestion to reduce the customs duty on refined oils specially for thesunflower oils and RBD Palmolein oil. According to the latest availabledata, total import of edible oil during the first quarter of the oil year(November 2002 to January 2003) was up by five per cent to 924,474 tonneas compared to 882,138 tonne for the same period of last year. The importof edible oils is reported at 288,496 tonne in January 2003 as comparedwith 272,674 tonne in January 2002. In the total imports palm oil importrepresents 81 per cent.