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CHAPTER - VII MARKETING PROBLEMS OF OIL PALM CULTIVATORS
India plays a predominant role in global oilseeds and vegetable oil
economy contributing about 15% of world’s oil crops area, 7% of world’s
oilseed production and 6.7% of vegetable oils production. The edible oil
industry is one of the most vibrant sectors of the Indian agricultural economy
with an annual turn-over of Rs.60,000 crores.
As in the case of other agricultural products, the prices of oilseeds in
seventies and eighties declined sharply in the market soon after harvest and
increased inordinately a few months later in the lean season; the difference
used to be more than the holding costs of storage, interest and reasonable profit
with the result that both the farmers and the consumers were subjected to
severe loss.
Hence fixing minimum support prices for oilseeds and entrusting public
agencies like National cooperative Marketing Federation (NAFED) with
effective market intervention had become essential to ensure protection of
returns and encourage adoption of modern crop production technology.
In order to attain self-sufficiency in edible oils, Govt. of India took up
various steps to promote the oilseeds cultivation in the country and to increase
the productivity of oilseeds. National Dairy Development Board (NDDB) is the
pioneer in achieving milk revolution in the country in cooperative sector
known as "Anand Pattern" and so it has been entrusted to promote the oilseeds
cultivation in the country on the similar lines of Milk Project. NDDB took up
the project in the year 1979 and selected 7 states in the country for
implementing the "Operation Golden Flow".In the initial years of the TMO, the
National Dairy development Board (NDDB) built a large network of oilseeds
cooperatives with storage and processing capabilities.
260
The initial thrust given by NDDB in its price support operations was a
critical factor for the success of TMO till the mid-nineties. However, oil seed
crops were at very low levels and there was no effective market intervention by
NAFED to give price support to oilseeds, moreover, support price policy has its
own limitation in the absence of other appropriate yield promoting factors as
well as rationalized EXIM policy. The support price policy and market
intervention can certainly help to promote the growth of oilseed crops.
Liberalizing trade in India’s oilseed economy
As per the commitments under Uruguay round agreement on
Agriculture, India removed all quantitative restrictions (QR) on imports of
edible oil. Even then this does not imply a free flow of imports.
Under the WTO rules, imports are to be regulated through tariff.
Uruguay round agreement provided option to member countries to convert QRs
to equivalent tariffs and provided a mechanism to declare maximum level of
tariff for the base period for each commodity. And hence, India can impose a
tariff up to 300 percent on import of palm oil and up to 100 percent on
vegetable oils, except soybean for which maximum tariff is fixed at 45 percent.
These tariffs, known as bound tariff, were to be reduced by 24 percent by the
year 2004. Edible oils are essential commodities and consumer interests are the
major determinants of policies in this sector. High income elasticity made this
process volatile 20.
These forces led to massive imports in the mid nineties and the
institution of an import substitution strategy. High tariff rates and Quantitative
Restrictions and liberalization of imports were components of this strategy.
20 HegdeD.M., “Oil Seed Scenario in India-Past, Present and future”,
Sustainable Production of Oilseeds, Agrotech Publishing Academy,
Udaypur,2008
261
The quest for raising self-sufficiency levels in edible oils remain a
legitimate policy objective. Leaving aside the question of drain on foreign
exchange reserves, the import volumes have become too large and an upsurge
in the world prices of this politically sensitive commodity can lead to serious
consequences. Policy makers have to exercise utmost caution in the matter of
regulating imports. It must be ensured that the benefit of increased productivity
flows to growers.
Care also has to be taken not to let low international prices affect the
domestic market. Political and international pressures on the government to
follow a friendly import policy must be resisted. Oilseeds policy frame-work
has to promote the goals of economic efficiency and social equity through a
creative combination of policies.
One of the conspicuous features of the oilseeds trade is the dominance
of private traders and intensive speculative activities in trading of oilseeds.
Despite a secular rise in oilseed/oil prices they are subjected to wide seasonal
fluctuations. The benefit of price rise was enjoyed more by the trader than the
grower. These factors are disincentive to oilseed growers. To solve these
problems cooperatives and regulated markets have been established in order to
eliminate the role of middlemen in the trade of oilseeds in order to enable the
grower to have a higher share in the consumer rupee. The National Dairy
Development Board (NDDB) has been implementing a project since 1979-80
with a view to restructuring the oilseeds and edible oil economy of India by
bringing farmers together under Anand-type cooperative federations. These
cooperatives procure oilseeds directly from oilseed growers, provide technical
input and extension services for production enhancement programs and also
look after all activities right from procurement, processing and marketing to
final sale of product. In this process not only are farmers paid a fair price based
on standardized quality assessment but also the consumers are given a quality
product at a fair price. As on March 31, 1987 there were 2,808 Anand-type
oilseeds cooperatives in seven states with a total farmer membership of 3.5
262
lakhs and covering an area of 8.9 lakh ha under oilseeds spread over 14,000
villages. Recent studies show that farmers participating in such cooperatives
have been benefited by earning and additional income of Rs 30 to 50per quintal
of oilseed sold. Since 1985 the crop insurance scheme has been extended to
oilseeds cultivation also. The rate of premium for oilseeds has been fixed at 1
percent of the amount insured as against 2 percent for food grains. If
popularized, this scheme would help cover the production risks faced by the
oilseed growers.
At present India cannot restrict imports of edible oils. However, it has
been suggested that instead of importing edible oils, oilseeds should be
produced domestically since they are not only cheaper but they could also
benefit the crushing industry which is hitherto grossly underutilized (only one-
third of India’s extraction capacity is presently utilized). One way of financing
India’s imports would be to encourage the exports of HPS groundnut and
oilcakes, and other surplus agricultural commodities. The policy of supplying
cheap imported oils at less than domestic prices to the Vanaspati industry has
been widely criticized. Almost 30 to 50 percent of the imported oils are
allocated to the Vanaspati industry and in turn the vanaspati industry has to
maintain an informal price control on the final product. Since vanaspati
(refined oil) is mostly consumed by the upper income group, the policy of
supplying cheap imported oils to the industry has been questioned.
Rationalising the price structure of imported oils has, therefore, been one of the
suggestions for augmenting resources for oilseeds research and development.
The long-term strategy to make India self-sufficient in its requirement of
edible oils should lay emphasis on technological upgradation, as mentioned
earlier. Investment in research to evolve location –specific high-yielding and
pest-resistant varieties of oilseeds should be stepped up considerably.
Increasing the coverage of irrigated area under oilseeds is worthy enough but
the matter of diverting some of our cereal area for oilseeds cultivation should
also be considered. Extending oilseeds cultivation to non-traditional areas,
263
particularly to the eastern states can also be insisted. The strategy to boost
India’s oilseeds output should lay emphasis on production of traditional and
non –traditional sources of oil. The potential of rice-bran, cottonseed and oil-
palm needs to be mentioned in particular. If the nation exploits the potential of
rice-bran and cottonseed fully it would be possible to generate an additional
one million tonnes of oil. The potential oil from seeds of tree/forest origin is
placed at about 1 million tonnes. Similarly production of solvent extracted oils
could be raised from the present 0.12 million t to about 0.35 million tonnes.
The nation’s maize output which is around 80 lakh tonne per annum can yield
over 1 lakh tonne of vegetable oil. Productivity of coconut, another major
source of edible oil in India has been declining due to root-wilt disease.
Replantation of diseased tree should be given priority in one’s quest for self-
sufficiency in edible oils. Oil-palm, if popularized, could be another important
source of edible oil. Its per hectare oil yield is the highest (over 500 kg) as
compared to other crops like coconut (615kg), sunflower (275 kg) groundnut
(201kgt), rapeseed-mustard (161kg), soybean 9120kg) and sesame (82kg). It is
a capital –intensive crop suited only for large-scale production under corporate
or cooperative management. Furthermore it is not a seasonal crop but is
produced all –round the year and is also singularly free from pests and diseases.
It gives a steady stream of income, spanning over 30 years after an initial
gestation period of five to seven years. India is striving to popularize oil-palm
cultivation in Kerala, Andaman-Nicobar Islands, Karnataka and other southern
states.
Through technological upgradation, appropriate economic incentives
and institutional reforms it would be possible for India to become self-
sufficient in its requirements of oilseeds and edible oils in the near future.
264
I. MARKETING OF OIL PALM FRESH FRUIT BUNCHES – MACRO-
PERSPECTIVE
Truly Oil palm is as one of the highest edible oil yielding crops that can
yield 4-6 tons of oil from 3-30 years of its life span. It produces 2 distinct oils –
Palm oil from the flesh of the fruit and Palm Kernel Oil from the seed or
kernel. For every 10 tons of Palm oil about 1 ton of Palm kernel oil can also be
obtained.
GLOBAL SCENARIO OF OIL SEED MARKETING
The market for the edible oils and fats has expanded along with the growth of world
population, increased Per capita consumption, and the desire to replace animal fats in
the preparation of diet items. There has been an overall increase of 335% in the
production of vegetable oils since 1980.
7.1GLOBAL PRODUCTION OF VEGETABLEOILS,1980-2009(MILLION
TONNES)
TYPE OF VEGETABLE
OIL 1980 1990 2000 2009
SOYBEAN 13.4 16.1 25.6 35.9
PALMOIL 4.5 11 21.9 45.1
RAPESEEDOIL 3.5 8.2 4.5 21.5
SUNFLOWEROIL 5 7.9 9.7 13
PALM KERNEL OIL 0.6 1.5 2.7 5.2
OTHERS 12.8 16.1 18.1 12
TOTAL 39.8 60.8 92.5 132.8
265
Among major vegetable oils, the growth in production of palm oil is
phenomenal. One can observe a tenfold increase between1980 and 2009 while
its major competitor, soybean oil, increased by 2.7 times during the same
period. Palm oil exceeded soybean oil in terms of global production in 2005.
By 2009, palm oil production of 45.1 million tonnes was equivalent to 34%,
while the market share for Soybean oil, Rapeseed oil and Sun flower oil were
27%, 16.2% and 9.8% respectively.
GLOBAL PRODUCTION OF PALM OIL
The rapid globalization and dismantling of trade barriers resulted in
many a change in today’s international trade environment. Being perennial
crop, palm oil starts yielding fruits 30 months after its planting and continues to
yield till 20-30 years. Global Crude Palm Oil production has been increasing
continuously since 1980-81. The production increased manifold from 4.9
million tons in 1980-81 to 44.95 million tons in 2009-2010.Malaysia and
0
10
20
30
40
50
60
70
80
90
100PR
OD
UCT
ION
(MIL
LIO
NTO
NN
ES)
7.1 WORLD PRODUCTION OF VEGETABLE OILS(MILLION TONNES)
1980 1990 2000 2009
266
Indonesia are the two largest Crude Palm Oil producers. Till 2003-04 Malaysia
was the largest palm oil producing country in the world but from 2003-04
onwards Indonesia took over the first position by surpassing Malaysia and
maintaining first position since then till now.
7.2 GLOBAL PRODUCTION OF OIL PALM (‘000T)
COUNTRY 1980 1990 2000 2009
INDONESIA 691 2413 6900 20900
MALAYSIA 2576 6095 10800 17566
NIGERIA 433 580 740 870
COLOMBIA 74 226 516 794
COTED'IVORE 182 270 290 NA
THAILAND 13 232 510 1310
ECUADOR 37 120 215 436
PAPUANEWGUINEA 35 145 281 470
OTHERS 769 786 1699 3236
TOTAL 4809 10867 21951 45111
SOURCE : OIL WORLD (SEVERAL YEARS)
STATUS OF INDIAN OIL PALM PRODUCTION COMPARED TO MARKET
LEADERS
India is in infancy stage in the cultivation of oil palm compared to the major market
share holders in this sector. Malaysia and Indonesia are the pioneers in this sector.
Initially Malaysia was the global market leader in oil palm production. From 2005-06,
267
Indonesia became the highest oil palm producer. Indian oil palm sector is in steady
growth as regards in the production of oil palm. But compared with the major
producers the production in India is very low. As the consumption is high and the
production is low, India has become largest oil palm importer from Malaysia and
Indonesia.
7.3 INDIAN OIL PALM PRODUCTION COMPARED WITH
MALAYSIA AND INDONESIA(1000MT)
YEAR MALAYSIA INDONESIA INDIA
2000-2001 58950 40950 142.823
2001-2002 59546 46800 128.873
2002-2003 66775 52600 157.736
2003-2004 69881 60426 168.416
2004-2005 74800 74000 176.141
2005-2006 79400 80250 244.688
2006-2007 79100 78000 258.903
2007-2008 83000 85000 255.572
268
IMPORT AND EXPORT OF OIL PALM AND ITS BY-PRODUCTS BY
INDIA
(a) IMPORT OF PALM BY-PRODUCTS FROM OTHER
COUNTRIES
The global demand for palm oil is growing, thus prompting an increase
in production in Malaysia and Indonesia. Such increasing demand for palm oil
is due to its relatively cheap price (compared to other vegetable oils) and
versatile advantage both as edible oil and as non-edible medium. Obviously the
growth in consumption of Oil Palm has made this vegetable oil dominate the
present global market.
0
20000
40000
60000
80000
100000
PRO
DU
CTIO
N (1
000M
T)
7.2 COMPARISION OF INDIAN OIL PALM PRODUCTION WITH MARKET LEADERS
MALAYSIA INDONESIA INDIA
269
7.4 IMPORT OF CRUDE AND REFINED PALM OIL BY INDIA
YEAR CRUDE PALM OIL
AND ITS
FRACTIONS
REFINED PALM OIL
AND ITS FRACTIONS
QUANTITY=1000KG QUANTITY=1000KG
2000-2001 994233 2060690
2001-02 1726498 1006621
2002-03 2691238 361387
2003-04 2848054 1178381.37
2004-05 1558431.58 1944933.45
2005-06 1959920 489263.7
2006-07 2541628.85 224753.32
2007-08 3276662.05 238238.26
2008-09 4348132.55 1201294.5
270
From the above graph it can be identified that both Refined and Crude Palm
Kernel oil are imported from other nations like Malaysia and Indonesia. The
above graph indicates that the import of Crude Palm Oil is increasing compared
to the import of refined Palm Oil which implies that the Crude form is
imported and it is processed internally in the country to refined form.
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
5000000
7.3 IMPORT OF CRUDE AND REFINED PALM OIL BY INDIA
CRUDEPALM OIL AND ITS FRACTIONS QUANTITY=1000KG
REFINED PALMOILAND ITS FRACTIONS QUANTITY=1000KG
271
7.5 IMPORT OF CRUDE AND REFINED PALM KERNAL OIL BY
INDIA
YEAR CRUDE PALM KERNAL
OIL
REFINED PALM
KERNAL OIL
QUANTITY=1000KG QUANTITY=1000KG
2000-2001 0 1923
2001-2002 0 2504
2002-2003 0 2843
2003-2004 130116.55 10910.61
2004-2005 89976.1 8999.48
2005-2006 108768.29 899.06
2006-2007 126478 972.76
2007-2008 147029.79 292.59
2008-2009 148454.09 4374.01
272
The above graph indicates that import of refined Palm Kernel Oil is very low
compared to the import of Crude Palm Kernel Oil. Similar to the Crude and
Refined Palm Oil import situation in India, the import of Crude Palm Kernel
Oil is very high ompared to the import of Refined Palm Kernel Oil.
0
20000
40000
60000
80000
100000
120000
140000
160000
200-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
7.4 IMPORT OF CRUDE AND REFINED PALM KERNAL OIL BY INDIA
CRUDE PALM KERNAL OIL QUANTITY=1000KG
REFINED PALM KERNAL OIL QUANTITY=1000KG
273
COUNTRYWISE IMPORT OF OIL PALM AND ITS PRODUCTS
China, Hong Kong, European Union and India are the largest importers of Oil
Palm from Indonesia and Malaysia. India imports major by-products of Palm
Oil from various countries, mostly from Malaysia and Indonesia. They are
Crude Palm Oil, Refined Palm Oil, Crude Kernel Oil and Refined Kernel Oil.
7.6 COUNTRYWISE IMPORTS OF CRUDE PALM OIL BY INDIA
DURING 2007-2009
Column1
2007-08
2008-09
COUNTRY
QUANTITY
(1000KG)
PRICE IN
LAKHS
QUANTITY
(1000KG)
PRICE IN
LAKHS
INDONESIA 2900979.5 538582 3585776 743032
MALAYSIA 311797.28 60711.6 668762 146476
THAILAND 41478.06 8241.75 78295 15124.7
SINGAPORE 8738 2025.8 2829 1205.97
SRILANKA 8560 1676.46 5353.42 1070.14
CAMBODIA 1055.19 190.72 5139 986.4
GERMANY 1000 178.13 0 0
ARGENTINA 500 117.6 0 0
OTHERS 2554 467.31 1978 444.4
TOTAL 3276662.03 612191 4348133 908340
274
Crude palm oil imports to India are from countries like Indonesia,
Malaysia, Thailand, Singapore, Srilanka and Combodia.There was increase in
Crude Oil import from Indonesia,Malaysia,Thailand and Combodia during the
years 2007-08 and 2008-09. Decrease in Crude palm oil imports can be
identified from countries like Singapore and Srilanka. Indonesia accounts for
82.46 %, Malaysia accounts for 15.3% and the rest 2.24 % of Crude Palm Oil
imports are from other countries.
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
QU
AN
TITY
(100
0kg)
7.5 INDIA'S COUNTRYWISE IMPORT OF CRUDE PALM OIL
2007-08 QUANTITY(1000KG) 2008-09 QUANTITY(1000KG)
275
7.7 COUNTRYWISE IMPORT OF REFINED PALM OIL
COUNTRY 2007-08
2008-09
QUANTITY
(1000KG)
Value in
Lakhs
QUANTITY
(1000KG)
value in
Lakhs
INDONESIA 163166.79 34981.17 874057.54 201635.95
MALAYSIA 35923.82 7639.72 323433 75164.19
BHUTAN 36973.07 15868.47 1934.94 929.68
BANGLADESH 2153.49 521.3 587.57 119.19
FRANCE 8.33 1.65 0 0
U ARAB EMTS 8 1.69 51 14.55
USA 3.02 1.18 0 0
SINGAPORE 0 0 1229 254.73
OTHERS 1.74 0.91 1.44 0.72
TOTAL 238238.26 59016.09 1201294.49 278119.02
276
India imports refined Palm oil from Indonesia, Malaysia, Bhutan,
Bangladesh and others.There was an increase in refined oil palm imports from
Indonesia, Malaysia and Singapore during the years 2007-08 and 2008-09. The
imports during the year 2008-09 from Bhutan, Bangladesh, France and USA
were less than the imports from Bhutan during the year 2007-08.Most of the
imports of Refined Palm oil were from Indonesia and Malaysia worth
201635.95 lakhs and 75164.19 lakhs respectively.68.5% of imports were from
Indonesia, 27% of Refined Palm Oil imports were from Malaysia and the
rest.5% of imports from other countries.
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000Q
UA
NTI
TY IM
PORT
ED
7.6 INDIA'S COUNTRYWISE IMPORT OF REFINED PALM OIL
2007-08 QUANTITY(1000KG) 2008-09 QUANTITY(1000KG)
277
7.8 COUNTRYWISE IMPORT OF CRUDE PALM KERNEL OIL
COUNTRY 2007-08 2008-09
QUANTITY
(1000KG)
VALUE IN
LAKHS
QUANTITY
(1000KG)
VALUE IN
LAKHS
INDONESIA 137204.89 49645.49 121871.09 57239.69
MALAYSIA 9549 3405.89 23497 10831.47
SRILANKA 275.41 118.45 81 36.31
SINGAPORE 0 0 999 623.59
ITALY 0.49 0.12 0 0
THAILAND 0 0 2006 1211.26
TOTAL 147029.79 53169.95 148454.09 69942.32
278
During the years 2007-08 and 2008-09 Palm Kernel oil was imported
from the countries like Indonesia, Malaysia, Srilanka, Singapore, Italy and
Thailand. In the year 2008-09, 82% of Crude Palm kernel oil was imported
from Indonesia, 15% from Malaysia and the rest 3% from other countries.
0
50000
100000
150000
200000
250000
300000IM
PORT
(100
0KG
)
7.7 INDIA'S COUNTRY WISE IMPORT OF PALM KERNEL OIL
2007-08 QUANTITY(1000KG) 2008-09 QUANTITY(1000KG)
279
7.9 COUNTRY WISE IMPORT OF PALM KERNAL OIL
COUNTRY 2007-08 2008-09
QUANTITY
(1000KG)
VALUE
IN
LAKHS
QUANTITY
(1000KG)
VALUE
IN
LAKHS
MALAYSIA 289.78 107.96 2289.72 694.72
INDONESIA 0 0 20000.65 591.66
SINGAPORE 0 0 83.64 30.2
FRANCE 0.11 0.2 0 0
U ARAB EMTS 2.7 1.12 0 0
TOTAL 292.59 109.28 4374.01 1316.58
280
Despite the mounting pressure by domestic oil producers Associations
to re-impose import duties on all edible oils,Indian government is reluctant to
impose import duty on Crude Palm Oil-the world’s cheapest edible oil – as it
would be more expensive for local consumers.India used to be the largest
importer of Malaysian Palm Oil until 2002. Later China became the biggest
importer of Malaysian Palm Oil because of the factors: the growth of its
economy,the abolishment of palm oil quota system and the import only in
refined form. India also imports its Crude Palm Oil mainly in refined form
from Indonesia and Malaysia.India’s domestic oil palm cultivators and oil palm
refineries are effected by the imports in this sector.India has an edible oil
refining capacity of 20 million metric tons annually and it imports almost 80%
of its edible oil requirement as crude oil.The refiners are particularly worried
about supplies from Indonesia,the biggest palmoil producer and exporter that
recently cut its export tax on refined ,bleached and deoderized palmolein in
bulk from 15% to 8%.This made importing palmolein cheaper then sourcing
crude palm oil from abroad and processing it locally or cultivating oil palm in
our country and extracting oil from it.Higher imports of refined products hurts
local refiners.
0
5000
10000
15000
20000
25000
MALAYSIA INDONESIA SINGAPORE FRANCE U ARAB EMTS
QU
AN
TITY
(100
0KG
)
7.8 INDIA'S COUNTRYWISE IMPORT OF REFINED PALM KERNEL OIL
2007-08 QUANTITY(1000KG) 2008-09 QUANTITY(1000KG)
281
b) AGGREGATE EXPORT OF OIL PALM PRODUCTS
Oil palm was introduced into our country in 1990. These palm gardens
started yielding after 3 years i.e. from 1993. India attained the ability to export
palm oil from the year 2000 – 01. Since 2000-01 India has been continuously
carrying out its oil palm export operations.But from the data given below it
can be identified that there is no consistency in quantity exported.In the year
2001-2002 highest quantity of oil palm was exported from India ie 12842T and
it was lowest in the immediate next year 2002-2003 ie 181.52T.
7.10 INDIA’S AGGREGATE EXPORT OF OIL PALM PRODUCTS
YEAR QUANTITY
EXPORTED(1000KG/T)
VALUE IN
LAKHS
2000-2001 313.54 57
2001-2002 12842.35 3711
2002-2003 181.52 86
2003-2004 1623.98 399
2004-2005 242.6 103
2005-2006 4487.83 863
2006-2007 1897.21 487
2007-2008 2837.57 1559
2008-2009 191.98 129
TOTAL 24618.58 7394
282
The above graph indicates that in the initial years there is wide gap
between quantity exported and value obtained from the exports which gives an
indication that the price of the exports is very low compared to the quantity
exported.
0
2000
4000
6000
8000
10000
12000
14000Q
uant
ity
Expo
rted
and
Val
ue O
btai
ned
7.9 INDIA'S OIL PALM QUANTITY EXPORTED AND REVENUE OBTAINED
QUANTITY EXPORTED(1000KG) VALUE IN LAKHS
283
7.11 COMPARATIVE ANALYSIS OF INDIA’S OILPALM EXPORTS
AND IMPORTS
YYYEAR
QUANTITY
EXPORTED (1000kg/ T)
QUANTITY
IMPORTED (1000kg/T)
2001-02 12842.35 2735623
2002-03 181.52 3055468
2003-04 1623.98 4167462.53
2004-05 242.6 3602340.61
2005-06 4487.83 2558851.09
2006-07 1897.21 2893832.93
2007-08 2837.57 3662222.69
2008-09 191.98 5702255.15
The above table makes a comparision of Exports and Imports of oil
palm in India.In all the years the exports are always less than imports.The
import during 2008-09 was highest compared to previous years with
5702255.15(1000kg) whereas exports were least during the same year
compared to the previous years with just 191.98(1000kg). As the soil
conditions and climatic conditions are favourable for the cultivation of oil
Palm, there is need for increasing domestic production to meet increasing
domestic consumption and to decrease imports. By decreasing imports the
savings in foreign exchange can be used to meet other more important needs
284
The above graph makes it clear that imports are huge compared
toexports.High imports indicate the potential for oil palm in the domestic
market. Today India along with China and European Union is the largest
importers of Palm oil.In fact, if the import dependence is decreased and self-
suffeciency is developed, India can contribute a larger part to the GDP and
create employment opportunity for lakhs of workers.
As per the Government of India statistics, India need 1.1 crores tonnes
of vegetable oil and production is only 75 lakh tonnes and hence India imports
40-50 lakh tonnes of oil every year amounting to Rs. 10,000 crores. Thus
losing the scarce foreign exchange. In order to overcome this problem India
needs to concentrate on Oil Palm cultivation, the highest yielding crop.
0
1000000
2000000
3000000
4000000
5000000
6000000O
IL P
ALM
EXP
ORT
S A
ND
IMPO
RTS(
1000
KG)
7.10 INDIAN OIL PALM EXPORTS AND IMPORTS
QUANTITY EXPORTED (1000kG) QUANTITY IMPORTED(1000kg)
285
II. MARKETING OF OIL PALM BUNCHES – MICRO- PERSPECTIVE
STATUS OF OIL PALM CULTIVATION IN INDIA
In India cultivation of oil palm was started in 1990.Indian Government
with the assistance of Horticulture department Identified Andhra Pradesh,
Karnataka, Tamilnadu, Gujarat, Orissa, Goa, Tripura, Assam, West Bengal,
Kerala, Maharashtra, Andaman and Nicobar Islands as potential areas for oil
palm cultivation. Out of them Andhra Pradesh holds good position in oil palm
cultivation. Table given below shows the commanding position of oil palm
cultivation in Andhra Pradesh.
7.12 OIL PALM PRODUCTION IN INDIA
YEAR Andhra
Pradesh
Karnataka Tamilnadu Gujarat Orissa
1992-93 1010 400 0 0 0
1993-94 3062 215 1671 40 0
1994-95 3700 1472 2212 232 6
1995-96 6700 2066 994 28 321
1996-97 4416 2278 1227 0 556
1997-98 3795 598 2076 144 452
1998-99 3205 239 667 8 48
1999-00 2465 85 739 0 91
2000-01 1207 194 939 20 0
2001-02 1428 124 117 0 0
2002-03 1948 0 48 193 335
286
2003-04 2779.62 0 24.4 831 452
2004-05 5998 0 13.98 234 1046
2005-06 9263 0 6.71 27.54 1591
2006-07 11882 0 2.68 57.39 3714
2007-08 12074 0 8.86 355.63 4314
2008-09 17049
0 4.8 518.28 3005
YEAR
Tripura Assam
West
Bengal Kerala Maharashtra
1992-93 0 0 0 0 0
1993-94 0 0 0 0 0
1994-95 72 0 0 0 0
1995-96 2 0 0 0 0
1996-97 12 10 0 0 0
1997-98 0 0 0 0 0
1998-99 0 0 0 0 0
1999-00 13 0 0 0 0
2000-01 98 0 0 102 0
287
2001-02 0 0 0 0 0
2002-03 0 0 0 570 0
2003-04 0 0 0 722 0
2004-05 0 12 0 1091.2 0
2005-06 0 0 0 1210 19
2006-07 0 18.5 300 1746.26 45
2007-08 0 1614 1000 1367 0
2008-09 0 2546.69 838 1937.56 0
7.11 OIL PALM PRODUCTION IN INDIA
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
A.P
karnataka
tamilnadu
GUJARAT
ORISSA
GOA
TRIPURA
ASSAM
WEST BENGAL
KERALA
288
ENTERPRENEURS-OIL PALM PROCESSING UNITS
While implementing the massive expansion program, the State
Government involved the private and co-operative entrepreneurs to take up oil
palm development. There are twelve entrepreneurs in Andhra Pradesh, five in
Orissa and Tamilnadu, four in Mizoram, Karnataka and Gujarat each, three in
Kerala, one in Goa and one in Andaman and Nicobar Islands. These
entrepreneurs procure import/ indigenous material, raise nursery, identify
suitable farmers, distribute seedling to them, provide technical advice and
procure the fruits when they are ready. The Oil Palm Act regulates the
relationship among the Government, the farmer and the entrepreneur.
In India oil palm Fresh Fruit Bunches are processed and converted into
palm oil and palm kernal oil in the processing units. The allocation of crude
palm bunches is done through ZONAL SYSTEM. Under this system palm
cultivating areas are divided into zones and each zone is allocated to a
processing unit. The processing unit takes the responsibility of collecting Palm
Bunches through its COLLECTION CENTRES set up in the vicinity of oil
palm cultivating areas. Its executives take the responsibility of colleting the oil
palm produce. After harvesting oil palm FFBs are transported to either
collection centers or to the processing unit directly depending on the distance
between their field and the processing unit. Mode of transportation may be
Auto/Tractor/Truck. Specific mode is selected based on the quantity of the
yield. If the distance is more, farmer sells the produce at collection centre and
he bears the transportation costs. If the distance between the field and the
processing unit is less, farmer sends the produce directly to the processing unit
and the processing unit pays for the transportation costs.
There is dissatisfaction among oil palm cultivators with regard to the
payment made by the processing unit towards transportation costs. They are of
the opinion that this payment is not sufficient to meet the expenses incurred for
the transportation of Fresh Fruit Bunches.
289
ENTREPRENUERS IN ANDHRA PRADESH
As already stated there are twelve processing units in AndhraPradesh.
Several processing operations are conducted to make the refined oil. The first
step in processing is at the mill, where the crude palm oil is extracted from the
fruit. Conversion of crude palm oil to refined oil involves removal of the
products of hydrolysis and oxidation, colour and flavour. After refining, the oil
may be separated (Fractionated) into liquid and solid phases by thermo-
mechanical means (controlled cooling, crystallization and filtering),and the
liquid fraction (olein) is used extensively as a liquid cooking oil in tropical
climates, competing successfully with the more expensive groundnut, corn, and
sunflower oils.
Extraction of oil from the palm kernels is totally different from palm oil
extraction, and is often carried out in mills that process other oilseeds (such as
groundnuts, rapeseed, cottonseed, and copra). The stages in this process
comprise grinding the kernels into small particles, heating (cooking), and
extracting the oil using an oil expeller or petroleum-derived solvent. The oil
then requires purification in a filter press by sedimentation. Extraction is to be
done in a well established unit where good machinery that can process 10 kg to
several tonnes per hour is available. Palm oil may also be fractionated, using
simple crystallization and separation processes to obtain solid (Steering) and
liquid (Olean) fractions of various melting characteristics. The different
properties of the fractions make them suitable for variety of food and non-food
products.
290
7.13 OIL PALM ENTREPRENEURS IN ANDHRA PRADESH
Sl.No
21
Name of the Unit Sector Capacity in
Operation(Tonnes
of FFB per Hour)
1. M/S A.P.Oilfed, Pedavegi-
West Godavari
Co-op 4
2. M/s. Radhika Veg.Oil,
Garividi,Vijayanagaram
Pvt. 7
3. M/s Ruchi Soya
Oil Palm Mill,
Ampapuram,Krishna Dist.
Pvt. 10
4. M/s Simhapuri Agro,
Manubrola,Nellore
Pvt. 5
5. M/s. Foods, Fats &
Fertilizers ltd. Tadepalli
Guddem,West Godavari
Dist
Pvt. 10
6. M/s.Godrej Agrovet,
Pothapalli,West Godavari
Dist.
Pvt. 10
7. M/s. Palmetech India Ltd.,
Poddapuram,East Godavari
Dist.
Pvt. 30
8. M/s. Nav Bharat Agro
Products,
Pvt. 5
291
JangaReddyGudem,West
Godavari Dist.
9. M/s Srinivasa Enterprises,
Srikakulam Dt.
Pvt 4
10 M/s Sri Lakshmi Balaji Oil
Palm Ltd,
Parvatipuram,Vizianagaram
Dt.
Pvt --
11 M/s. Agro Co-Operative
Corporation, Asilmetta,
Visakhapatnam Dt
Pvt 5
12 M/s. AP OILFED Ltd.
Aswaraopet, Khammam Dt.
Pvt 10
ENTREPRENUERS IN KRISHNA DISTRICT
Though there are two zones in Krishna District, major part of Krishna
District is covered by RUCHI SOYA INDUSTRIES LTD, AMPAPURAM. A
minor part is served by GODREJ AGROVET LTD (Musunur Mandal). Ruchi
Soya Industries Ltd is one of the India’s largest edible oil companies and it
acquired the oil palm processing unit located in Ampapuram (MAC Oil Palm
LTD) in 2009. Ruchi Soya has brands like Nutrela Soyumon (Soyabean
oil),Ruchi Gold (Palmolein oil), Sunrich (Sunflower oil) and Mandap (Mustard
Oil). Godrej Agrovet is another processing unit which covers major part of
west Godavary District and a small part of Krishna District i.e.Musunur
Mandal. Godrej Agrovet is the largest producer of palm oil in India.
21H.P.Singh, “National and International Scenario of Oil Palm”, Proceedings of
National conference on Oil Palm, July, 2009
292
PRICE FIXATION FOR OIL PALM FRESH FRUIT BUNCHES
In the initial stages of oil palm crop cultivation in our country price was
fixed by the Government based on the percentage of oil recovery from fruit
bunches. For example 16% of oil recovery fruit bunches rate was fixed as 10%
of crude oil rate. With this system farmer had to depend on the companies for
the percentage of oil recovery. This resulted in controversy between farmers,
Government and the Processing Company. With the persistent struggle from
the farmer community, the Government of Andhra Pradesh formed a
committee with the members from Agricultural Department, Farmer
representatives and oil palm company representatives under the control of
Director of National Research Centre .The committee worked out a formula on
August 2005 as 12% of Crude oil price. Later the formula was changed to
include the Palm Kernel Oil for price fixation. A scientific formula was
achieved in March2008. As per the formula, 33% of the amount obtained from
the sale of Kernel oil and Cake in addition to 12% of the crude oil price.
Another critical factor which influences the price of palm oil and
consequently Fresh Fruit Bunches is the import duty structure fixed for Palm
oil. During the year 1995, the import of edible oils had been brought under
Open General License (OGL) as a result of which prior approval from
Government of India was necessary. So the palm oil prices are affected by
cheaper imports from Malaysia and Indonesia
Majority of oil palm respondents are of the opinion the committee
should take into consideration increasing cost of cultivation while fixing the
price of oil palm.
293
7.14 FLUCTUATIONS IN PRICE OF OIL PALM
YEAR AVERAGE PRICE /MT(Rs)
1993-1994 2000
1994-1995 2000
1995-1996 2250
1996-1997 2500
1997-1998 2625
1998-1999 2875
1999-2000 2650
2000-2001 2750
2001-2002 2590
2002-2003 3162
2003-2004 3794
2004-2005 4165.6
2005-2006 3900
2006-2007 4165.6
2007-2008 4694.6
2008-2009 5170.4
2009-2010 4144
2010-2011 5000.08
294
MARKET INTERVENTION SCHEME
During 1999-2000, the crude oil rates and fruit bunches rate collapsed
and the farmers were put to heavy loss. The State and Central Government
came forward with a Market Intervention Scheme due to heavy pressure put
forth by State Oil Palm Farmers’ Association. Under this scheme Minimum
Support Price was fixed at Rs.2750 per Ton. The processing companies paid
Rs. 2300 per Ton and the rest was paid by Government of India and
Government of Andhra Pradesh.
In the year 2008 the oil palm Fruit Bunches rate fell down from Rs. 6200 per
Ton to Rs. 3500 per Tonne due to International Market Price variation. Many
farmers started uprooting their Palm Gardens due to non remunerative price. To
prevent other farmers from following the same path and to prevent increase in
imbalance between production and consumption, Government increased MSP
(Minimum Support Price) to Rs. 5000 per Tonne from March 2009.
But all the farmers are of the opinion that the MSP should be increased to
Rs.8000 per Ton.
0
1000
2000
3000
4000
5000
6000
PRIC
E/T(
Rs)
PRICE CHANGES IN OIL PALM FFB'S
Price /T(Rs)
295
ROLE OF OIL PALM FARMERS ASSOCIATIONS
Untill 1995 District and Zonal Farmers Welfare Associations were in
force and later the Andhra Pradesh Oil Palm Farmers Association was
established, since then the associations are functioning with the objective to
get remunerative price to the oil palm bunches. In the beginning Government
used to fix the rates based on the percentage oil recovery from the fruit
bunches. For example 16% of oil recovery fruit bunches rate was fixed as 10%
of crude oil rate. With this system the oil palm farmers have to depend on the
companies for the percentage of oil. Due to the persistent struggle of the
Association scientific formula is worked out which is in existence till date.
In the year 2008 National Oil Palm Farmers Association was
established by the representatives from oil palm growers from all the states.
Since then the welfare measures are being taken care by this association.
INTERCROP
Oil Palm is a wide spaced perennial crop with a long juvenile period of three
years. Triangular method of planting is followed with 9 meter spacing to
accommodate 57 plants per acre or 143 plants per hectare. So much space in
between the plants is utilized to generate income during the juvenile phase of
the crop. Vegetables, banana, flowers, tobacco, chillies, turmeric, ginger,
groundnut, cocoa etc are grown. These intercrops serve as potential source of
income since the farmer cannot get any return on the Oil Palm during the initial
stage.
MARKETING CONSTRAINTS FOR OIL PALM FARMERS
Although oil palms FFB are sold readily by the farmers through Oil
Palm Processing Unit yet there are some problems:
296
NON AVAILABILITY OF SKILLED LABOUR
As and when the fruit ripens, bunches of fresh fruit are harvested using
chisels or hooked knives attached to long poles. Each tree has to be observed
every 10-15 days as bunches ripen throughout the year. Harvesting involves
cutting of the bunches from the tree. These fruit bunches (each bunch weighing
about 25 kg) are then collected and transported either to collection centre or
processing unit. Harvesting becomes difficult with the increase in height of oil
palm tree. It requires skilled labour. Scarcity of skilled labour for harvesting
increases the cost enormously.
PERISHABLE NATURE
Fresh Fruit Bunches of oil palm are highly perishable in nature. After
harvesting they have to be disposed immediately within 24 hours. If not, Free
Fatty Acid content increases and so oil content decreases. At collection centers
FFBs’ are weighed and collected on a specified day usually once in a fortnight.
Due to scarcity of skilled labour it becomes difficult for all the farmers to
harvest all their crops one day before collection
PERIODIC COLLECTION OF FFBS’(Fresh Fruit Bunches)
Collection centers are located in oil palm cultivating mandals and the
collection time is determined basing on the convenience of Processing Unit
executives. The collection dates may not match with the ripening time of the
bunches. If the processing unit is distantly located from the field the farmer has
to wait for collection date irrespective of readiness of bunches. Bunches are
collected weekly once in season and fortnightly once in unseason. Farmers
want to have collection system in such a way that the centers are open
throughout the year.
297
ZONAL SYSTEM
In Andhra Pradesh there is zonal system for the processing of oil palm
bunches. Zonal system avoids competition among the processing units and
enables them to make effective utilization of market potential. The factory in
the concerned zone should buy all FFB produced by all the oil palm growers in
that zone. Out of 210 respondents, 160 respondents expressed that they were
exploited by the monopoly of processing units under zonal system. They
desired more than one processing units in each zone to have more facilities to
the farmers.
MINIMUM SUPPORT PRICE
In India oil palm is not a voluntary crop. During the last quarter of the
20th
century India depended on other nations for cooking oil. Central
Government identified the need for developing self-reliance in this sector and
undertook many measures. As one of the measures Central Government
introduced oil palm on experimental basis in 1990 under Oil Palm
Development Program. But during 1999-2000 the oil palm prices fell down
drastically. Many oil palm farmers were demotivated and as the crop was
completely new to them they were uncertain about the future returns and so
they started uprooting their crops and those farmers switched back to seasonal
crops, fruits and vegetables. To prevent that situation, Government introduced
Minimum Support Price under Market Intervention Scheme. Even now if price
falls below the Minimum Support Price, Government has to pay the rest of the
amount. All the respondents are dissatisfied with the Minimum Support Price
which is at present Rs.5000/ton. All of them want Government to increase
Minimum Support Price to meet the rapidly increasing cost of cultivation. They
demand that MSP should be increased to Rs.8000/ton.
298
IMPOSITION OF VAT
Another major problem faced by oil palm cultivators is imposition of VAT on
the oil palm FFBs. Usually VAT is imposed on manufactured products but
with regard to oil palm it is fixed after deducting VAT. All the 210
respondents expressed their dissatisfaction on imposition of VAT on oil palm.
Their argument is that they are made to pay Value Added Tax though there is
absolutely no ‘Value Addition’.
TRANSPORTATION COSTS
Another major problem faced by oil palm cultivators is with regard to
transportation from field to either collection centre or processing unit. As the
FFBs are heavy they have to be transported either in Truck or tractor.
Harvesting is done weekly in season and fortnightly in unseason all through the
year. So, considerable amount has to be spent on transportation. The farmer is
paid transportation costs if the produce is taken to the processing unit only.
Transportation costs are paid at the rate of Rs.225/Ton for 15Km. Respondents
opinion is that the transportation costs are not sufficient for delivering the
produce to the processing unit.
INCREASING COST OF CULTIVATION
The cost of cultivation increased with the increase in the cost of inputs
like fertilizers, pesticides, transportation, harvesting and labour cost.
Harvesting becomes difficult due to increase in height of palm tree and due to
heavy weight of the palm bunches. In addition labour cost has become doubled.
Paradoxically the price of Oil Palm bunches is not in proportion to the increase
in the cost of cultivation.
DELAYED PAYMENTS
Oil palm cultivators have to open a bank account. Payments are made
through bank within 14 days after delivering the FFB. Out of 210 farmers 147
299
farmers opined that this time period should be decreased to enable the farmers
can make required repayments in time. Otherwise low prices, delayed
payments and the basic increase in the cost of cultivation make their problems
more and more intense.
NON PAYMENTS
Whenever the price of Oil Palm price is below the Minimum Support
Price, Government is supposed to pay back farmers the difference between the
existing price and the Minimum Support Price. But Government failed to make
the payment in time. Promises to pay compensation through the MIS are made
every year, but they are not at all kept. By October 2010 itself, the State and
Central Governments had to pay Rs.50 crore to oil palm farmers in Andhra
Pradesh on 50:50 bases.
INABILITY TO COPE WITH MONTHLY PRICE FLUCTUATION
Price fixation system which is followed in our country is considered
defective from the point of view of farmers. Price is to be fixed on the basis of
the cost of cultivation but it is not considered. The price is fixed on the basis of
International crude palm oil price. Price is revised on monthly basis which
makes the farmer insecure and uncertain about future returns. Out of 210 oil
palm respondents, 200 respondents strongly felt that it is very difficult for them
to adjust to the continuous price alterations.
7.15 TRADE POLICY CHANGES IN EDIBLE OILS WITH SPECIAL
REFERENCE TO PALM OIL
April, 1994
22
Import of RBD Palmolein placed on OGL with 65%
import duty.
March, 1995 Import of all edible oils (except coconut oil, palm kernel
oil, RBD palm oil, RBD palm stearin) placed on OGL
300
with 30% import duty.
1996-97 (in regular
Budget)
Further reduction in import duty to 20% + 2% (special
duty of customs) brining total import duty to 25%.
Another special duty of custom @3% was later imposed
bringing the total import duty to 25%.
July, 1998 Import duty further reduced to 15%.
1999-2000 Import duty raised to 15% (basic)+10% (surcharge) =
16.5%.
December, 1999 Import duty on refined oil raised to 25% (basic)+10%
(Surcharge) = 27.5%.
June, 2000 Import duty on crude oils raised to 25% (basic) + 10%
(surcharge) = 27.5% and on refined oils raised to 35%
(basic) + 10% (surcharge) + 4% (SAD) = 44.04%. import
duty on Crude Palm Oil (CPO) for manufacture of
vanaspati retained at 15% (basic) + 10% (surcharge)
= 16.5%
November, 2000 Import duty on CPO for manufacture of vanaspati raised
to 25% and on crude vegetable oils raised to 35%. Import
duty on CPO for other than vanaspati manufacture raised
to 55%. Import duty on refined vegetable oils raised to
45% (basic) + 4% (SAD) = 50.8%. Import duty on
refined palm oil and RBD palmolein raised to 65%
(basic) + 4%(SAD) = 71.6%
March, 2001, (As
amended on 26.4.2001)
Import duty on crude oils for manufacture of
vanaspati/refined oils by the importers registered with
directorate of VVO&F raised to 75% (for others import
301
duty levied at 85%) except soyabean oil, rapeseed oil and
CPO at 45%, 75% and 75% respectively. The duty on
refined oils including RBD Palmolein raised to
85%(basic) except in the cases of soyabean oil and
mustard oil where the duty is placed at 45% (basic) and
75% (basic) respectively due to WTO binding. In
addition, 4% SAD levied on refined oils.
October, 2001 Import duty on Crude palm oil and its fractions, of
edible grade, in loose or bulk form 75% to 65%
November, 2001
Import duty on crude sunflower oil or safflower oil
reduced to 50% upto an aggregate of 1,50,000 MTs
(Tariff Rate Quota) of total imports of such goods in a
financial year subject to certain condition.
Import duty on refined rape, colza or mustard oil reduced
to 45% upto an aggregate of 1,50,000 MTs (Tariff Rate
Quota) of total imports of such goods in a financial year
subject to certain condition.
March, 2002 Status quo on import duty structure of vegetable
oils/edible oils maintained. Import of vanaspati from
Napal be levied SAD@4%
August, 2002 SAD is not applicable on vanaspati imported from Napal
under TRQ.
March, 2003 Status quo on import duty structure of vegetable
oils/edible oils maintained.
April, 2003 Import duty on Refined palm oil and RBD palmolein
reduced from 85% to 70% and SAD not applicable on
302
edible oils
July, 2004 Import duty on Refined Palm oil and RBD palmolein
raised from 705 to 75%
February, 2005
Import duty on Crude Palm Oil and Crude Palmolein
rasied from 65% to 80%
Import duty on Refined palm oil and RBD palmolein
raised from 75% to 90%
2006-2007 (Budget) With effect from 1.3.2006, edible oils attract a special
additional duty of customs @4% and import duty on
Vanaspati and similar products raised from 30% to 80%
August, 2006 With effect from 8.8.2006, special additional duty of
customs not applicable on vanaspati imported from Napal
w.e.f. 11.8.2006, import duty on Crude palm oil/ crude
palmolein reduced from 80% to 70% and import duty
on refined palm oil/RBD palmolein reduced from 90%
to 80%
January, 2007 With effect from 24-1-2007, import duty on crude
palm oil/ curde palmolein reduced from 70% to 605,
import duty on refined palm oil/RBD palmolein
reduced from 80% to 67.5%, import duty on crude
sunflower oil reduced from 75% to 65% and import duty
on refined sunflower oil reduced from 85% to 75%
2007-08 (Budget) With effect from 1.3.2007, import duty on crude
sunflower oil has been reduced from 65% to 50% and
import duty on refined sunflower oil and other oils has
been reduced from 75% to 60%. Further edible oils
(excepts soybean oil, rapeseed oil and mustard oil) will
303
attract education cess of 3% of the aggregate of customs
duty. With effect from 1.3.2007, all edible oils will not
attract special additional duty of customs @4%
April, 2007 With effect from 13.4.2007 import duty on curde palm
oil/crude palmolein has been reduced from 60% to
50% and import duty on refined palm oil/ RBD
palmolein has been reduced from 67.5% to 57.5%
July, 2007 With effect from 23.7.2007 import duty on crude palm
oil and refined palm oil/palmolien reduced to 45%
and 52.5% respectively and import duty on crude and
refined sunflower oil reduced to 40% and 50.0%
respectively. Import duty on crude/refined soybean oil
reduced to 40%
March, 2008 With effect from 21.3.2008 import duty on crude palm
oil/palmolien and refined palm oil/palmolien has been
reduced from 45% to 20% and 52.5% to 27.5%
respectively and import duty on crude and refined
sunflower oil has been reduced from 40% to 20% and
50% to 27.5% respectively and import duty on crude &
refined mustard/repeseed oil has been reduced from 75%
to 20% and 75% to 27.5% respectively.
April, 2008 With effect from 1st April, 2008, the customs duty on
crude and refined forms of palm oil, palmolein, palm
kernel oil, soyabean oil, repeseed / mustard oil,
sunflower oil, safflower oil, groundnut oil, coconut oil
and some other vegetable oils has been reduced to zero
percent and 7.5% respectively, vide notification no.
42/2008-customs.
304
November,2008 w.e.f.18.112008 the custom duty on degummed soybean
oil has been increased to 20% vide notification
No.122/2008-customs. W.e.f 20.11.2008 the export of
edible oils is permitted in branded consumer packs of up
to 5kgs, subject to a limit of 10,000 tons during the next
one year up to 31st oct, 2009 vide notification no. 60(RE-
2008)/2004-09. w.e.f 20.11.2008 the export of fish oil is
permitted vide notification no.39 (RE-2008) 2004-09
March, 2009 w.e.f 24.3.2009 custom duty on crude soybean oil has
been reduced to zero percent vide notification no.
27//2009 customs. Ban on export of edible oils (except
coconut oil and oils of minor forest origin through Kochi
port) extended up to 16.03.2010 vide Notification no. 98
(RE-2008) / 2004-09 dt. 17.4.2009
22Damodaran.T and Hegde D.M., ”Trade Policy Changes in edible Oils”, Oil
Seeds Situation: A Statistical Compendium 2010, Directorate of Oilseeds
Research, Hyderabad, Pp – 268-269.
Recommended