Govt. Move to Hike Import Duties in Palm Oil: Brings Cheer to Oil Palm Farmers and Industry

By 121 News

Chandigarh 19^th August:-  OPDPA (Oil Palm Developers and Processors Association), the nodal agency for oil palm development in India, cheered the latest move by the government to increase the import duties on Palm Oil. This is a tremendous boost to the industry as the duty hike will help farmers to get remunerative price for their produce and help the domestic processing industry remain self-sufficient.

The government has announced raising of import duty on crude Palm Oil to 15% from current 7.5% and refined palm oil to 25% from the current 15%.  The impact of increase on crude Palm Oil alone translates to around Rs.40-60 crore extra in the hands of the farmer.

Sanjay Goenka, President of Oil Palm Developers and Processors Association (OPDPA), said that the move by government brings in a strong sense of self-sufficiency to the Oil Palm ecosystem. The price paid to the farmer is based on the realization that Palm Oil fetches in the market. Increase in import duty helps in increase of price of palm products, thereby resulting in higher price of the produce to the farmers.

While this development is extremely positive and addresses some of the challenges – there is a need to ensure that the farmer is protected from price fluctuations. Currently, the price of the produce is fixed by a scientific formula, derived by the CACP committee, which links the price payable to the farmer to the landed cost of crude palm oil. A price stability mechanism is required to keep farmer's price remunerative at all times.

The association is continuing its persuasion with the Government to protect the interests of the Oil Palm farmer by requesting the Government to bring in a strong MSP framework that insulates the farmer from market forces.

Commenting on the developmentP. Narender Reddy, Sales Head 3F Oil Palm Pvt. Ltd. said that the Oil Palm industry can play a very important part in making India self-sufficient towards its edible oil needs. Oil Palm is a very versatile product that finds multiple uses in industry, generating large scale employment and contributes to the growth of the underdeveloped regions. If it continues to receive the encouragement it deserves and its potential is fully leveraged, it can help in saving millions of dollars of valuable foreign exchange against import of Palm Oil.