Ruchi Soya has welcomed the hike in import duty on edible oils announced by the Government late last week, accompanied by an increase in the duty differential. The import duty on Crude Palm Oil has been increased from 7.5 per cent to 15 per cent, on RBD palm (refined palm oil) from 15 per cent to 25 per cent and on crude soft oils like soybean oil from 12.5 per cent to 17.5 per cent. The differential duty on import of refined vis-a-vis crude palm oil is now 10 per cent against 7.5 per cent earlier.
Founder and Managing Director, Ruchi Soya Industries Ltd., Dinesh Shahra said, “We welcome the increase in import duty on edible oils which is a big positive for organised edible oil players, coming on the heels of GST. The strengthening rupee and low international edible oil prices combined with the earlier duty differential which was favouring import of refined edible oils had led to immense pressure on the domestic industry with many refining facilities on the verge of closure. The increase has come not a moment too soon. This will make domestic refining competitive, in line with the ‘Make in India’ credo as we move towards nutritional security.”
Commenting on the increase in duty differential, COO, Ruchi Soya Industries Ltd., Satendra Aggarwal said, “The increase in duty differential from 7.5 per cent to 10 per cent between refined and crude palm oil should bring down the quantum of import of refined palm oil which was swamping the market. This will give an impetus to the domestic refining industry by encouraging import of crude palm oil over refined palm oil.”
Elaborating on the specific impact for Ruchi Soya, Aggarwal said, “At Ruchi, we foresee a shift from import of RBD palmolein to Crude palm oil with a positive impact on our refining capacity utilisation. Currently, at 45-50 per cent, we see this going up to 65-70 per cent. The increase in capacity utilisation is in turn expected to boost our topline by around 15 per cent on an annualised basis. This will enable us to regain market share of packed oil sales back from importers and traders of refined oil and will also improve our bottomline by 15 to 20 per cent.”