Coconut sector hit by import subsidy for edible oils

The tariff concession and subsidy provided to imported edible oils is affecting the marketability of coconut oil, the Coconut Development Board has said.

Due to the incentives and subsidies, the market price of the imported edible oils at the retail level is low. During November 2011, to May 2012, the import of refined oil (RBD palmolein) increased by 97 per cent and reached 10,84,033 MT compared to 5,51,327 MT during the corresponding period, last year. During the same period, crude palm kernel oil import increased by 82 per cent and crude palm oil by 14 per cent. The current year’s import  is 64,692 MT while last year, it was 35,564 MT only. The excessive import of edible oils during the peak coconut production season would trigger the crash in prices of coconut oil. The price movement of coconut oil reveals that the import of large quantities of palm oil will result in the crash of coconut oil price. The country now meets half of its edible oil requirements through import, the Board said.

As per the notification numbered 27/2009-Customs, with effect from 24.3.2009, the customs duty on crude edible oils has been reduced to zero per cent.

Meanwhile, to provide relief to consumers from rising prices and to augment the availability of oil seeds, since 2008, the Government of India has introduced a scheme for distribution of edible oils to ration card holders with a Central subsidy of ` 15 per kg, the press statement said.