7/1/07 (NewKarala.com)  Mumbai - Solvent Extractors Association of India (SEAI) has asked the government to maintain a status quo on the vegetable oil duty structure to ensure better profitability to farmers.

"Lowering of duties means lowering the prices of edible oil and ultimately lowering the price of oilseed. This would discourage farmers and would lead them to move away from oilseed to growing other remunerative crops," SEAI Executive Director B V Mehta told PTI.

He said edible oil prices do not call for a panic reaction by the government as the Wholesale Price Index of last ten years shows the lowest appreciation in price of edible oil as compared to other commodities.

The Finance Ministry, after extending the 10 per cent import duty cut on palm oil in August, is reportedly mulling another 10 per cent deduction.

Presently, the crude palm oil attracts 70 per cent basic custom duty, RBD Palmolein 80 per cent and refined and degummed soybean oil 45 per cent.

On the rise in edible oil prices in the fag end of 2006, Mehta said prices should be compared over a period of three to five years.

"Domestic prices of edible oil in the January-October 2006 period did not have much change as compared to the corresponding period in 2004. In November and December 2006, the prices rose five per cent as against the 2004 period." The bullish global trends and diversion of vegetable oil for bio-diesel production also contributed in pushing up the prices.

--- PTI