259

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.