Import Of Palm Group Of Oils Through Kochi Banned

Chennai: The Centre on Wednesday banned import of palm group of oils through Kochi port in what is seen as an effort to help slumping coconut oil prices to recover.

Pressure on centre

The Directorate General of Foreign Trade in a notification said palm oil and its fraction, whether or not chemically modified, crude palm oil, other palm oil, RBD palm oil, RBD palmolein, other such oil, palm kernel oil besides its fraction were not permitted to be imported through Kochi port.

According to official sources, the move follows pressure on Centre to come up with measures to prop up coconut oil prices, which have dropped alarmingly in the last few months and are quoting even below RBD palmolein that is considered as the cheapest edible oil.

Replacement

For example, in January 2005 coconut oil was quoted at Rs 73 a kg, while RBD palmolein ruled at Rs 38. Currently, coconut oil is ruling at Rs 44 and palmolein at Rs 54. Due to this, vanaspati units, especially in the North, have replaced coconut oil for palm oil in the production process. Industry sources alleged that ghee was being adulterated with semi-hydrogenated coconut oil in the northern parts of the country.

Board proposal

The sources said the Coconut Development Board had last month sent a note to the Agriculture Ministry seeking ban on import of palm group oils through all southern ports. But its proposal was rejected.

Then, it sought a ban on import through Kochi port at least to which the ministry agreed.

Not keen

According to industry sources, the Centre was not keen on banning import through all southern ports in view of edible oil prices ruling firm and also due to the current festival period. “Now with arrivals of kharif oilseeds, the Centre has agreed to ban the import through Kochi port, though it has on its own nominated agencies to import edible oil,” they said.

Globally, edible oil prices have gained sharply in the last one year or so as these are now used in the production of bio-diesel. Palm oil, in particular, is popular for such use what with Malaysia itself setting up bio-diesel units that use the oil. Interest to set up bio-fuel units has increased in view of rising crude oil prices, which topped a record $88 a barrel on Tuesday before easing on Wednesday.

Production rise

According to industry sources, one of the reasons for the crash in coconut oil prices is increase in production, especially in Tamil Nadu. The ban, however, is expected to have minimal effect as the trade expects palm oil to flow into Kerala either through Mangalore or Tuticorin port.