28/12/2008 (The Hindu), New Delhi - Apprehensive of re-imposition of duty on crude palm oil, vanaspati manufacturers have asked the government to desist from such a move as it could lead to higher prices of cooking oil.

In a joint memorandum to Prime Minister Manmohan Singh, Vanaspati Manufacturers Association (VMA) and Indian Vanaspati Producers Association (IVPA) said that since prices of major oilseeds are ruling above their minimum support prices, the situation does not warrant any hike in custom duty on crude palm oil, a major raw material in vanaspati making.

The Centre in April had reduced import duty on refined oils to 7.5 per cent and abolished customs duty on crude edible oils. But recently it imposed 20 per cent duty on crude soyabean oil while crude palm oil was not touched.

Mumbai-based Solvent Extractors Association last week met Commerce Minister Kamal Nath to demand imposition of customs duty on crude palm oil.

The vanaspati producers said groundnut seed is ruling at Rs 2,250 a quintal in Saurashtra in Gujarat, a major growing region, against its MSP of Rs 2,100 a quintal, while soyabean price is at Rs 1,800 a quintal compared to its MSP of Rs 1,390 a quintal.

Crude palm oil and other palm group of oils constitute about 85 per cent of India's import basket as the country buys over 63 lakh tonnes of vegetable oils in a year.

The vanaspati makers alleged that a section of the industry is demanding imposition of duty on crude palm oil "to make speculative profits in the stocks of soyabean seeds and groundnut shells hoarded by them."

They fear that re-imposition of duty would open flood gates for cheaper vanaspati from Sri Lanka and Nepal, which may adversely affect the domestic manufacturers.