Industry urges govt to put vanaspati in the negative list

New Delhi, Sep 20 (UNI) The industry has demanded that vanaspati be put in the negative list, as heavy duty-free inflow from Nepal and Sri Lanka under the Free Trade Agreements has forced more than 50 units to down their shutters in the last 18 months.

The main reason being that a factory in Sri Lanka or Nepal gets the crude palm oil, the main raw material at zero duty, whereas a manufacturer in India had to pay 88.8 per cent duty, which has now been reduced to 78.2 per cent, but that too only upto October 31, 2006, said Indian Vanaspati Producers' Association (IVPA) in a statement issued here.

''This resulted in a cost advantage of over Rs 13,500 and Rs 15,000 per tonne to a factory in Nepal and Sri Lanka respectively,'' IVPA added.

The industry has suggested that ''in case this is not possible at this juncture, the tariff rate quota (TRQ) should not be more than 50,000 tonnes per annum for each of the two countries.'' It said the total vanaspati market in India is limited to 13-14 lakh tonnes per annum and in case a substantial quantity of 3.5 to 4 lakh tonnes or around 30 per cent is marketed by these two neighbouring countries below the cost of production of domestic brands, the indigenous industry is bound to suffer cash losses and would have no option but to close down the operations.

The production during 2004-05 was 11.5 lakh tonnes as compared to 12.5 lakh tonnes in the previous year. The capacity utilisation was a mere 23 per cent. The average rate of production in the first six months of the current oil year (November 2005 to April 2006) is even lower around 9.72 lakh tonnes only.

IVPA President J K Khaitan, at its 29 Annual General Meeting here recently, informed that out of 264 installed units only 116 are in operation and during the last 18 months over 50 units have downed their shutters and more are on the verge of closure.

Mr Khaitan urged the Government to take remedial measures to save the industry from going into oblivion and provide a level playing field to the domestic players.

UNI BBS CS KN1458