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OIL DIVISION

About Us

It seeks to coordinate management of edible oils in the country through a multi-pronged strategy, namely, (i) assessment of the domestic demand for edible oils and its availability from domestic sources. Mismatch of demand and supply is met through import of edible oils so as to maintain their prices at reasonable level; (ii) It also closely monitors prices of edible oils both in the domestic and in the international market and initiate necessary policy measures whenever necessary. The Division compiles the production of edible oil on the basis of online submission of data by vegetable oil industries registered with the Directorate. The monthly production data of edible oils is transmitted to M/O Statistics & PI for compilation of monthly Index of Industrial Production (IIP) which is released on 12th of every month. The Division is staffed with qualified technical people who assist the Ministry in the coordinated management of Vegetable Oils particularly relating to production/availability and monitoring of prices.

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Edible Oil Scenario

Importance of Edible Oils in the Country’s Economy

Oil Oilseeds and edible oils are two of the most sensitive essential commodities. India is one of the largest producer of oilseeds in the world and this sector occupies an important position in the agricultural economy, accounting for the estimated production of 30.64 million tons of nine cultivated oilseeds during the year 2017-18 (November-October) as per 3rd Advance Estimates released by the Ministry of Agriculture on 16.05.2018. India contributes about 6-7% of the world oilseeds production. Export of oil meals, oilseeds and minor oils was about 4.74 million tons in the financial year 2017-18 valued at Rs 15176 crores.


Types of Oils commonly in use in India

India is fortunate in having a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut, mustard.rapeseed, sesame, safflower, linseed, nigerseed.castor are the major traditionally cultivated oilseeds. Soyabean and sunflower have also assumed importance in recent years. Coconut is most important amongst the plantation crops. Efforts are being made to grow oil palm in Andhra Pradesh, Karnataka, Tamil Nadu and North- Eastern parts of the country in addition to Kerala and Andaman & Nicobar Islands. Among the non-conventional oils, rice bran oil and cottonseed oil are the most important. In addition, oilseeds of tree and forest origin, which grow mostly in tribal inhabited areas, are also a significant source of oils. Figures pertaining to estimated production of major cultivated oilseeds, availability of edible oils from all domestic sources (from Domestic and Import Sources) during the last ten years are as under: -

( Quantity in lakh Tons)

Oil Year (Nov.- Oct.)

Production of Oilseeds*

Net availability of edible oils from all domestic sources

Imports**

Total Availability of Edible Oils

2008-09

277.19

84.56

74.98

159.54

2009-10

248.83

79.46

74.64

154.10

2010-11

324.79

97.82

72.42

170.24

2011-12

297.98

89.57

99.43

189.00

2012-13

309.43

92.19

106.05

198.24

2013-14

328.79

100.80

109.76

210.56

2014-15

266.75

89.78

127.31

217.09

2015-16

252.50

86.30

148.50

234.80

2016-17

312.76

100.99

153.17

254.16

2017-18

306.38*

101.69

104.00 (upto July,2018)

Source : * As per Final 3rd Advance Estimates (dated 16.08.2017) released by Ministry of Agriculture.

** DGCIS


Consumption Pattern of Edible Oils in India

India is a vast country and inhabitants of several of its regions have developed specific preference for certain oils largely depending upon the oils available in the region. For example, people in the South and West prefer groundnut oil while those in the East and North use mustard.rapeseed oil. Likewise several pockets in the South have a preference for coconut and sesame oil. Inhabitants of northern plain are basically consumers of fats and therefore prefer Vanaspati, a term used to denote a partially hydrogenated edible oil mixture of oils like soyabean, sunflower, ricebran and cottonseed oils. Many new oils from oilseeds of tree and forest origin have found their way to the edible pool largely through vanaspati route. Of late, things have changed. Through modern technological means such as physical refining, bleaching and de-odorization, all oils have been rendered practically colorless, odorless and tasteless and therefore, have become easily interchangeable in the kitchen. Oils such as soyabean oil, cottonseed oil, sunflower oil, rice bran oil, palm oil and its liquid fraction- palmolein which were earlier not known have now entered the kitchen. The share of raw oil, refined oil and vanaspati in the total edible oil market is estimated roughly at 35%, 60% and 5% respectively. About 60% of domestic demand of edible oils is met through imports out of which palm oil.palmolein constitutes about 62%. The consumption of refined palmolein (RBD palmolein) as well as its blending with other oils has increased substantially over the years and is used extensively in hotels, restaurants and in preparation of wide varieties of food products.


Major Features of Edible Oil Economy

There are two major features, which have significantly contributed to the development of this sector. One was the setting up of the Technology Mission on Oilseeds in 1986 which has been converted into a National Mission on Oilseeds and Oil Palm (NMOOP) in 2014. This gave a thrust to Government's efforts for augmenting the production of oilseeds. This is evident by the very impressive increase in the production of oilseeds from about 11.3 million tonnes in 1986-87 to 30.64 million tons in 2017-18. Most of the oilseeds are cultivated on marginal land and are dependent on rainfall and other climatic conditions. The other dominant feature which has had significant impact on the present status of edible oilseeds/oil industry has been the program of liberalization under which the Government's economic policy allowing greater freedom to the open market and encourages healthy competition and self regulation rather than protection and control. Controls and regulations have been relaxed resulting in a highly petitive market dominated by both domestic and multinational players.


Export Import Policy on Edible Oils

The country has to rely on imports to meet the gap between demand and supply. Import of edible oil is under Open General License. In order to harmonize the interests of farmers, processors and consumers and at the same time, regulate large import of edible oils to the extent possible, import duty structure on edible oils is reviewed from time to time. W.E. F.14.06.2018, the import duty on all crude and refined edible oils was raised to 35% and 45% respectively while the import duty on Olive oil was increased to 40%. The import duty on Crude and Refined Palm Oil remained at 44% and 54% respectively.

In order to ensure availability of edible oil in the country, export of edible oil has been banned w.e.f. 17.03.2008, which was extended from time to time. With effect from 06.02.2015, export of ricebran oil in bulk has been permitted. With effect from 27.03.2017, export of groundnut oil,sesame oil, soyabean oil and maize (corn) oil has been permitted. With effect from 06.04.2018, export of all edible oils except mustard oil was made free without quantitative ceiling; pack size etc, till further orders. Export of mustard oil is permitted in packs of up to 5 Kg with a Minimum Export Price (MEP) of USD 900 per MT.

Name of Oils

Rates of Import Duty . Effective Dates

Crude Palm Oil

0%

(01/04/08)

0%

(17/03/12)

2.5%

(23/01/13)

2.5%

(23/01/13)

7.5%

(24/12/14)

12.5%

(17/09/15)

7.5%

(23/09/16)

15%

(11/08/17)

30%

(17/11/17)

44%

(01/03/18)

RBD Palmolein

7.5%

(01/14/08)

7.5%

(17/03/12)

7.5%

(17/03/12)

10%

(20/01/14)

15%

(24/12/14)

20%

(17/09/15)

15%

(23/09/16)

25%

(11/08/17)

40%

(17/11/17)

54%

(01/03/18)

Crude Soyabean Oil

0%

0%

(17/03/12)

2.5%

(23/01/13)

2.5%

(23/01/13)

7.5%

(24/12/14)

12.5%

(17/09/15)

12.5%

(17/09/15)

17.5%

(11/08/17)

30%

(11/08/17)

35%

(14/06/18)

Refined Soyabean Oil

7.5%

7.5%

(17/03/12)

7.5%

(17/03/12)

10%

(20/01/14)

15%

(24/12/14

20%

(17/09/15

20%

(17/09/15

20%

(11/08/17)

35%

(17/11/17)

45%

(14/06/18)

Crude Sunflower Oil

0%

0%

(17/03/01)

2.5%

(23/01/13)

2.5%

(23/01/13)

7.5%

(24/12/14)

12.5%

(17/09/15)

12.5%

(17/09/15)

17.5%

(11/08/17)

30%

(17/11/17)

35%

(14/06/18)

Refined Sunflower Oil

7.5%

7.5%

(17/03/12)

7.5%

(17/03/12)

10%

(20/01/14)

15%

(24/12/14)

20%

(17/09/15)

20%

(17/09/15)

20%

(17/09/15)

35%

(17/11/14)

45%

(14/06/18)

Crude Rapeseed oil

0%

0%

(17/03/12)

2.5%

(23/01/13)

2.5%

(23/01/13)

7.5%

(24/12/14)

12.5%

(17/09/15)

12.5%

(17/09/15)

12.5%

(17/09/15)

25%

(17/11/17)

35%

(14/06/18)

Refined Rapeseed oil

7.5%

7.5%

(17/03/12)

7.5%

(17/03/12)

10%

(20/01/14)

15%

(24/12/14)

20%

(17/09/15)

20%

(17/09/15)

20%

(17/09/15)

35%

(17/11/17)

45%

(14/06/18)

Others

-

-

-

-

-

-

-

-

Crude-30% ref-35%

(02/02/18)

Crude-35% ref-45%

(14/06/18)


Source:-As notified by Depatment of Revenue.

Major recent decisions in respect of edible oils during 2017-18:

1. Vide Notification No. 47/2018-Customs dated 14 th June, 2018, import duty on all Crude and Refined oils, except palm oil and olive oil increased to 35% & 45% respectively, import duty on Olive oil increased to 40%.

2. Vide Notification No. 01/2015-20 dated 06.04.2018 export of all edible oils except Mustard oil made free without quantitative ceiling, pack size etc till further orders. Export of Mustard oil is permitted to be exported in consumer packs of upto 5Kg with a minimum export price of USD 900.

3. Vide Notification No. 29/2018 dated 01.03.2018, customs duty on Crude Palm Oil increased to 44% and customs duty on Refined Palm/Palmolein increased to 54%.

4. With the implementation of FSSAI Act, 2006 w.e.f. 5th August, 2011, the edible oil industries is now governed by FSSAI for issue of license, safety and standard parameters. However, the data monitoring of procurement for the edible oil industries are being administered by the Directorate under Vegetable Oil Products, Production and Availability (VOPPA)(Regulation) Order, 2011.


E-GOVERNANCE INITIATIVES

In order to improve and systemize the data management system in the vegetable oil sector, the Directorate of Sugar & Vegetable Oils under Department of Food and Public Distribution has developed a web based platform (evegoils.nic.in) for online submission of inputs by vegetable oil producers on monthly basis. This has helped the Government to take prompt and informed policy decisions for better management of vegetable oil sector. The new system also provides transparency in the data management of the vegetable oil industry as well as Government’s working. The portal also provides window for online registration and submission of monthly production returns.


Status of the Vegetable Oil Industry(as on 31.01.2018)

Vegetable Oil Industries registered under VOPPA(R) Order, 2011, with the Directorate

Type of Industry

No. Of Units Registered

  1. Vanaspati, Interestified Vegetable Fats

100

  1. Refinery along with Solvent plant & Oil Mills.

220

  1. Oil Mill & Blended Edible Vegetable Oil.

313

  1. Solvent Extraction Units

127

Total

760


Major decisions in respect of edible oils and fats since 2007:

1.By virtue of Notification No. CUS NTF No. 08/2007 dated 24.1.2007,import duty on Crude Palm Oil/Crude Palmolein has been reduced from 70% to 60%, 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%.

2.W.e.f. 01.03.2007, import duty on Crude Sunflower Oil has been reduced from 65% to 50% and import duty on refined Sunflower Oiland other Oils has been reduced from 75% to 60%. Further edible oils (except Soyabean oil, rapeseed oil and mustard oil) will 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%.

3.W.e.f 13.4.07, import duty on Crude Palm Oil/crude palmolein has been reduced from 60% to 50% and import duty on Refined Palm Oil/ RBD has been reduced from 67.5% to 57.5%.

4.W.e.f. 23.7.2007, import duty on Crude Palm Oil/Palmolein and Refined Palm Oil/Palmolein has been reduced from 50% to 45% and 57.5% to 52.5% respectively and import duty on Crude and Refined Sunflower Oil has been reduced from 50% to 40% and 60% to 50% respectively and import duty on Crude and Refined Soyabean Oil has been reduced from 45% to 40%.

5.The earlier Order dated 12.06.2000 and 21.04.2003 wherein minimum level of usage of indigenous oils and maximum level of usage of expeller mustard oil in vanaspati were stipulated, have been rescinded vide Order No. 45-VP (2)/99 dated 11-2-2008 under the provisions of Vegetable oil Products (Regulation) Order, 1998. Thus as on date, there is no mandatory compulsion regarding usage of indigenous oils including expeller mustard oil in the manufacture of vanaspati.

6.W.e.f 21.03.2008, import duty on Crude PalmOil/Palmolein and Refined Palm Oil/Palmolein 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/Rapeseed Oil has been reduced from 75% to 20% and 75% to 27.5%respectively.

7.W.e.f. 1 st April,2008, the customs duty on crude and refined forms of Palm Oil, Palmolein, Palm Kernel Oil, Soyabean Oil, Rapeseed/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 issued by the Ministry of Finance, Department of Revenue.

8.DGFT vide notification no. 122/2008-Customs has increased the custom duty on degummed Soyabean Oil to 20% w.e.f 18.11.2008. However, the custom duty has been reduced to Nil w.e.f 24.3.2009 vide DGFT Notification No. 27/2009-customs. The duty structure of 0% on crude oils and 7.5 % on refined oils has been continued.

9.DGFT vide Notification No. 85 (RE-2007)/2004-2009 dated 17 th March,2008 has banned export of all edible oils under Chapter 15 of Schedule I.However, export restrictions have been lifted in respect of castor oil (of non-edible grade), coconut oil (through Cochin Port) and certain oils (namely, Kokum oil/fat, sal oil/fat/stearine, Dhup oil, neemseed oil,Nigerseed oil, Mango Kernel oil/stearine/olein, processed or refined sal fat) produced from minor forest origin vide Notification No. 92(RE-2007)/2004-2009 dated 1.4.2008 issued by Department of Commerce for period of one year. The ban of export was extended upto 16.03.2010 vide notification No. 98(RE-2008)/2004-09 dated 17.4.2009. DGFT vide notification 39(RE-2008)2004-09 has permitted the export of fish oil w.e.f 20.11.2008. The ban imposed vide notification no. 98(RE-2008)/2004-09 was extended upto 30.9.2010 vide notification No. 04/2009-2014 dated 4 September ,2010. The ban imposed vide notification no. 04/2009-2014 dated 4.9.2009 was extended upto 30.9.2011 vide notification No.07(RE-2010)/2009-2014 dated 30 September, 2010. Vide Notification No.77(RE-2010)/2009-14, dated 28 th September, 2011, the ban on export of edible oils with above exemption was extended upto 30.9.2012. Vide Notification No. 24 (RE-2012)/2009-14, dated 19 th October,2012, the ban on export of edible oils has been extended till further orders.

10.DGFT vide notification no. 60(RE-2008)/2004-09 has permitted the export of edible oils in branded consumer packs of upto 5 Kgs, subject to the limit of 10000 tons during the next one year upto 31.10.2009 w.e.f 20.11.2008.It was extended upto 31.10.2010 w.e.f 1.11.2009 and further extended upto 31.10.2011 w.e.f 1.11.2010. Vide Notification No. 77(RE-2010)/2009-14, dated 28 th September, 2011, the export of edible oils in branded consumer packs with a ceiling of 10,000 tons was extended from 1.11.2011 to 31.10.2012. Export of edible oils banned w.e.f. 17.03.2008 was extended till further orders Vide Notification No. 24(RE-2012)/2009-14 dated 19 th October 2012. Notification No. 32 (RE- 2012)/2009-14 dated 5 th February, 2013 castor oil, coconut oil from all EDI Port and through Land Custom Stations (LCS), certain oils produced out of minor forest produce have been exempted from the prohibition on export of edible oils and export of edible oils in branded consumer packs of upto 5 kgs. subject to a Minimum Export Prices of USD 1500 per ton is allowed. Further vide Notification No. 45 (RE-2013)/2009-2014 dated 9 th October, 2013, MEP on export of edible oils in branded consumer packs of upto 5 Kgs has been reduced to USD 1400 per MT. This was further reduced to USD 1100 vide Notification No. 80(RE-2013)/2009-2014 dated 30 th April 2014.

11.State Governments have been authorized to re-impose stock restrictions with respect to edible oils/oilseeds with effect from 7 th April, 2008 which has been extended upto 30.9.2015.

12.In order to provide relief to the poorer section of the society, from the rising prices of edible oils, the Central Government introduced a Scheme for Distribution of 10 lakh tons of edible oils in 2008-09 at a subsidy of Rs. 15/- per kg. through State Governments/UTs@ 1 kg. per ration card per month. The scheme was extended during 2009-10, 2010-2011, 2011-12 and further in 2012-13 upto 30.9.2013. After the implementation of the Scheme, edible oil prices have substantially declined and poorer sections were provided edible oils at subsidized rates.

13.In order to check the instances of under-invoicing of Edible Oil imports,the Government had fixed tariff value on their import vide Notifications issued by Ministry of Finance and revised from time to time. Government has taken decision to defreeze the tariff value of freezed since 2006 to align it with the current international prices which will help to augment the domestic availability of edible oils and better capacity utilization of refining industry. The tariff value is revised fortnightly.

14.In order to fulfill the obligations of Bussiness Rules of the Department, a new order namely Vegetable Oil Products Production and Availability (Regulation) Order 2011 (GSR. 664-E of 2011) under Section 3 of Essential Commodity Act 1955 was notified on 7 th September 2011.

15.Vide Notification No. 02/2013-Customs dated 23 rd January, 2013, the import duty on crude edible oils has been increased from 0% to 2.5%.

16.Vide Notification No. 02/2014-Customs dated 20 th January, 2014, the import duty on refined edible oils has been increased from 7.5% to 10.0%.

17.Vide Notification No. 34/2014-Customs dated 24 th December, 2014, the import duty on crude oils increased from 2.5% to 7.5% and import duty on refined edible oils has been increased from 10.0%to 15.0%.

18.Vide Notification No. 46/2015-Customs dated 17 th September, 2015, the import duty on crude oils increased from 7.5% to 12.5% and import duty on refined edible oils has been increased from 15.0% to 20.0%.

19. Vide Notification No. 51/2016-Customs dated 23 rd September, 2016, the import duty on crude palm oil decreased from 12.5% to 7.5% and import duty on refined palm oils has been decreased from 20.0% to 15.0%.

20. Vide Notification No. 71/2017-Customs dated 11 th August, 2017, the import duty on crude palm oil increased from 7.5% to 15% and import duty on refined palm oils has been increased from 15.0% to 25.0%.Import duty on Crude Soyabean oil increased from 12.5% to 17.5%

21. Vide Notification No. 87/2017-Customs dated 17 th November,2017,import duty on Crude and Refined Palm oils increased to 30% & 40% respectively, import duty on Crude and Refined Soyabean oil increased from to 30% & 35% respectively, import duty on Crude and Refined Sunflower oil increased from to 25% & 35% respectively and import duty on Crude and Refined Rapeseed oils increased to 25% & 35% respectively

22. Vide Notification No. 43/2015-20 dated 27 th March,2017, Groundnut oil,Sesame oil, Soyabean oil and Maize oil have been exempted from the ban on export of edible oils.