In a bid to prevent the market from being flooded with imported crude soybean oil, the Soybean Processors Association of India (SOPA) has written to Narendra Modi requesting to raise the import duty. 37.5% on imported crude soybean oil and 45% on refined soybean oil, which is the WTO bound rate. SOPA hopes that this move will push the domestic industry to start exporting soybean meal again as well boost soybean and other oilseed growers. The main concern is the check the increasing import of cheap soybean oil.
SOPA chairman Davish Jain in the letter written to the Prime Minister said the last 3 years have been the toughest for the soybean processing industry. The toughest period for the industry as it led to the closure of numerous units. The only reason the chairman alleged is the ever growing import of cheap edible oils inclusive of soybean oil. The oils are allowed to be imported at a low rate of duty which has in turn made domestic soybean meal expensive and rendered it uncompetitive in the global market. A clear indicator of this is the country’s soybean exports. While soybean exports once earned the nation Rs. 15,000 crores, it has fallen to 1,500 crores in the last four years.
A look at the data and it is apparent that soybean meal exports took a blow as the soybean meal imports went up. The impact of increased soy oil import itself is around Rs. 25664 crores.
“The burgeoning import of soybean oil which has increased several fold from a mere 10.55 lakh tons per annum (average of 2011-13) to 40 lakh tons (likely import in 2016) is also detrimental to the interest of oilseed cultivation in the country and will take us toward being totally dependent on imported oil as our own production of oilseeds may further go down,” the letter adds.
While the entire oilseed processing industry is under duress, especially soybean processing units which face closure due to cheap oil imports, a handful of large importers and refiners are compelling the government to reduce the duty on crude edible oil. So the industry is now split into two, with the importers on one side and the industry in the other end.
Now, when it is the matter of survival for the indigenous crushing industry, it is clear that any drop in import duty will only lead to more trouble, especially for farmers forcing them to move away from soybean cultivation. A move which will force the nation more dependent on imports. Jain alleged that if foreign suppliers decide to take advantage of the situation and increase the price of edible oil, then the situation will be the same as that of pulses. India pulses shortage has driven a global frenzy with more and more countries urging their farmers to focus on the cultivation of pulses.