Date:12/08/2004 URL: http://www.thehindubusinessline.com/2004/08/12/stories/2004081200801200.htm

Back Govt policies upset vanaspati industry

Our Bureau

Mumbai Aug. 11

GOVERNMENT policies have been far from helpful to the domestic vanaspati producers who continue to fight their battle on several fronts.

Wide-ranging problems including rates of customs duty, imports from neighbouring countries and unethical practices have meant that the capacity utilisation in the industry has fallen alarmingly and sickness is becoming pervasive.

"It is a matter of great concern that a large number of vanaspati factories (80 at the last count) have closed their operations during the last couple of years and more are on the verge of closure," lamented Mr I.R. Mehra, Executive Director of Indian Vanaspati Producers Association (IVPA).

The industry is currently said to be operating at a low 26 per cent capacity utilisation.

In a representation to the Government, the association president, Mr J.K. Khaitan, has pointed out the inverted duty structure (higher duty on the raw material crude palm oil at 65 per cent and lower duty on the finished product vanaspati at 30 per cent) distorted the market.

There is also demand to put vanaspati and edible oil in the negative list of imports forming part of bilateral trade agreements with neighbours such as Sri Lanka and SAARC countries.