Indian palm oil refiners are lobbying for a ban on refined imports after 39 licences were suspended for suspected rule violations.
Import permits on refined, bleached and deodorised (RBD) palm olein were made mandatory in January to protect the local industry, when around 1mn t worth of permits were approved to enter the country.
But the Directorate General of Foreign Trade is investigating 37 licences issued to product originating from Nepal and Bangladesh amounting to 300,000t and two Indonesian-origin permits totalling 150,000t.
Suspicions were aroused as Nepal and Bangladesh had no palm refining capacity but could export to India without paying customs duties, while the two largest palm producers in the world Indonesia and Malaysia were required to pay a 45pc import tax.
"Some of the companies that held licenses I never even heard of, they are not regular palm traders," said executive director of the Solvent Extractors Association of India (SEAI) Dr B. V. Mehta.
Mehta added that much of the material was coming on trucks via land borders in east India, and that those found in violation of the rules will have to pay any owed duties in full.
The SEAI wants to prohibit all RBD imports and to just allow crude palm oil inflows, given that India has around 20mn t/yr of refining capacity that is only half utilised.
Covid-19 lockdown measures are also hastening the call for a ban as local palm consumption has dropped to around 300,000 t/month from 700,000 t/month. Current restrictions are in place until 17 May but expected to be extended and Mehta emphasised that demand, particularly from hotels and restaurants, will likely remain muted for months even after restrictions are lifted.
Mehta also pointed to the fact the export duties of refined palm from Indonesia were lower than those for crude palm oil, making landed prices of the latter more expensive.
Average cif India prices of RBD palm olein were $703/t in February compared with $708/t for CPO, though the discount was nearly $50/t in May last year.
RBD olein imports totalled just 300,000t between November 2019-February 2020, compared with 650,000 t a year earlier, before restrictions were imposed.
"If they can protect their industry, why not India?" Mehta said.
