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OILS AND FATS

Fifty-five lakh tons of kharif groundnut crop good sign, says Chaturvedi
Wednesday, 02 November, 2016, 08 : 00 AM [IST]
Our Bureau, Mumbai
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Timely and adequate monsoon has enabled India’s oilseed crops to rebound with vengeance. After a long time, the country may see 55 lakh tons of kharif groundnut crop and 110 lakh tons of soya. These are good early signs and are expected to rejuvenate the industry.

This was stated by Atul Chaturvedi, president, Solvent Extractors Association of India (SEA). The body has been actively engaged in pursuing various initiatives which are relevant and crucial for people’s health and wellness.

Groundnut survey
“This year, we will be harvesting a bumper crop of of 55 lakh tonnes groundnut, led by Gujarat, which has produced a record crop of nearly 30 lakh tonnes during the kharif season,” Chaturvedi stated.

A 20-member team representing the SEA Groundnut Promotion Council, under the leadership of Govindbhai G Patel, convener, SEA Oilseed Crop Estimate Committee, undertook an extensive survey of groundnut crop in Gujarat by visiting its major districts growing groundnut and a secondary survey  to assess the groundnut crop in the rest of the states and pegged the kharif groundnut crop of the country at nearly 55 lakh tons.

“Further, considering a normal rabi groundnut crop of nearly 15 lakh tonnes, the total production of groundnut in-shell would be about 70 lakh tonnes for the current oil year 2016-17 and that there would be ample groundnut available for crushing and export,” Chatuvedi said, adding that groundnut would be treated as an oilseed crop.
 
Goods and service tax

“The Centre has proposed a four-tier structure at GST Council suggesting six per cent for essential food items, while 12 per cent for FMCG and other food items.  We have strongly pleaded that oilseed, oil, oilcake/meal being the essential food items, deserve to be classified under the lowest rate as this price-sensitive essential commodity affects consumers,” Chaturvedi said.

“Moreover, edible oil, being an agro-based product, impacts the lives of a large number of farmers who are involved in agriculture. It is, therefore, necessary that the sensitive essential items of mass consumption like edible oils, oil seeds and oilmeals should either be exempted wholly or taxed at the lowest slab rate under the proposed GST structure in line with oter essential commodities like rice, wheat, sugar etc. and the rate should be the same for all states.  If the tax is pegged high, it will lead to distortion in the market,” he added.
 
Pre-budget memorandum for vegetable oil & oilseeds sector
Minister of state for commerce and industry Nirmala Sitharaman invited the industry to represent immediately if hit by the current duty structure.
 
SEA submitted a pre-budget memorandum for the vegetable oil and oilseeds sector 2017-18, covering various issues affecting the vegetable oil and oilseed sector including need to (a) increase the difference in customs duty between imported crude edible oil and refined edible oil to encourage Make in India Programme, (b) Lower the import duty on oilseeds to augment raw material supply and implement the Make in India programme, (c) Lower the duty to nil on import of oilcakes and rice bran to increase overall availability of feeds for cattle, poultry and aqua feeds and (d) Permit exports of all edible oils in bulk without MEP.

Chaturvedi said, “We would be pursuing these agendas vigorously.”
 
Pending cases under PFA Act

A large number of cases under the Prevention of Food Adulteration Act, 1954, and other orders specified in Schedule 2 of the Food Safety and Standards Act, 2006, are still pending in various courts and tribunals across the country.  

In a sizable number of such cases, the offences alleged to have been committed may not be very serious in nature and the penalties/punishments prescribed for such offences are also not substantial.  

The pendency of such cases for a long time not only burdens the judicial system, but also diverts the scarce resources of the government in pursuing these matters rather than deploying them in effective implementation of the provisions of the Food Safety and Standards Act, 2006, to ensure safe and wholesome food for the consumers.  
 
We had raised this matter at the meeting called by the FSSAI chairman, and as per his direction, the Association had compiled and submitted the pending cases under the Prevention of Food Adulteration Act, 1954.
 
“The members that FSSAI advised the commissioners of food safety of all states/UTs to examine all pending cases against food business operators (FBOs) under provisions of various enactments and orders repealed on enactment of Food Safety and Standards Act, 2006 and take a view on the withdrawal of the same, if considered appropriate,” Chaturvedi said.  
 
Options trading in crude palm oil (CPO)
“We understand that SEBI has been making preparations for launching commodity options trading in exchanges,” said Chaturvedi.

“As an industry association consisting of active users of the derivative instruments for managing risks, we are quite excited about the prospect of witnessing a healthy growth in the commodity market in general on introduction of options.  Members of our industry believe that palm oil options would provide for cost effective risk management instrument and to deliver its value to the end users,” he added.   
 
“The palm oil industry is going through challenging times on account of a host of market and policy-related factors both in the domestic markets and that of the producer countries. In such a time, we hope that SEBI, in its wisdom, would comprehend the high and continued threat to our market on account of volatility in crude palm oil (CPO) prices. Against this backdrop and on this hope, we have requested SEBI to kindly consider introduction of Options Trading on CPO in domestic commodity exchanges,” Chaturvedi said.
 
Legal Metrology (Packaged Commodities) (Amendment)
Recently, the Department of Consumer Affairs has issued a Notification called as the Legal Metrology (Packaged Commodities) (Amendment) Rules, 2016 regarding retail sale price of any essential commodities and standard quantity.

“While we appreciate the intention of the legislature by this Amendment is to handle the drastic retail level inflation in the price of some goods particularly that of pulses, however, we believe that these rules will create confusion in the market,” Chaturvedi said.

“By virtue of this Amendment, the retail sale price of the packaged commodity, which also attracts provisions of Essential Commodities Act, 1955 (Act), will have to be fixed and notified by the Competent Authority under the Act and then the same will be applicable to such packaged commodity,” he added.

“For example, we cannot compare between milk that is sold in a tetra pack and milk that is being sold loose. Similarly, packaged edible oil and loose oil cannot be compared for the same reason,” Chaturvedi said.

“This amendment will encourage the sale of loose oils because in the event that the authorities control the selling price for packaged edible oils, implementing the same for loose oils will be extremely difficult (on account of adulteration and volume manipulation at millions of points of sales),” he added.

“This, in turn, could significantly increase the health hazards for the common man as well as lead to him being cheated. Hence, to enforce same controlled price for packaged commodities as well as to the commodities sold in loose is per se unfair and unjust.  We have represented to the department to kindly relook the notification and withdraw the Amendment,” Chaturvedi said.
 
MoUs with international bodies
SEA is closely associated with Solidaridad Network Asia Limited, Hong Kong, for promoting key sustainability issues in the vegetable oil and oilseed sector in India.  Similarly, SEA is closely associated with International Trade Centre (ITC), Geneva, Switzerland, an agency of the World Trade Organisation and United Nations for Investment Opportunity for India to invest in the oilseed sector in Tanzania and Uganda.

“Recently, my predecessor Pravin Lunkad led a delegation to these countries to explore the full potential of bilateral trade,” Chaturvedi stated.
   
GM rapeseed
The matter regarding allowing release of commercial variety genetically-modified (GM) rapeseed developed by India was deferred by the Supreme Court thanks to the objections taken by some non-governmental organisations (NGOs) and institutes.
 
GM variety of mustard seeds will be same that of conventional pungent variety of mustard seeds grown in India and not that of “00” variety of canola seeds grown in Europe or Canada.  SEA is for GM variety of conventional mustard seeds.
 
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