Kerala

State palm oil industry in jitters

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Cut in import duty will affect Oil Palm India and Plantation Corporation of Kerala

The Centre slashing the import duty of crude and refined palm oils has brought gloom for the estates run by Oil Palm India Limited and Plantation Corporation of Kerala, with the possibility of an increased inflow looming large.

Under the ASEAN agreement and the India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA), the government has brought down the import duty on crude palm oil from 40% to 37.5% and that on refined palm oil from 50% to 45%. “The Centre is trying to help corporates who have plantations in other Asian countries. The move will badly hit domestic refiners and farmers. We are already struggling to develop infrastructure and buy machines. This will slow down our progress,” says Vijayan Kunissery, chairman, Oil Palm India Limited.

Established in 1977, Oil Palm India Limited has over 3,500 hectares of plantation in Yeroor, Chithara and Kulathupuzha in Kollam, employing around 1,000 persons. Another unit cultivating oil palms in Kerala is Plantation Corporation of Kerala’s 705-hectare estate in Kalady.

“Business will be affected and all the units in Kerala will find it difficult to market their product. Export earnings will also go down,” says J. Udayabhanu, chairman, Plantation Corporation of Kerala.

Labour unrest

The sector is already in a difficult spot with resentment mounting among the labourers. While all public sector plantations, including tea and rubber, got a wage hike recently, those working in oil palm farms received zero increase. Labour issues may crop up in the sector very soon.

“We were told that our wages were not revised as oil palm plantations are not part of Plantation Labour Committee that decided to hike wages. They say the industry suffered a loss of ₹10 crore due to the fluctuations in palm oil price. If the situation worsens due to the new policy of the Centre we will have to suffer. We are not responsible for the loss and we are planning to start a strike soon,” said a trade union representative.

Coconut farmers’ angst

Though not directly connected to issue, the coconut farmers believe it will be hard for them to survive if cheap palm oil keeps flooding the market.

“This has happened earlier as well. The increase in import volume will hit our livelihood because a lot of people will switch to palm oil and the price for coconut and copra will drop,” says Baburaj P., farmer.

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Printable version | Jan 20, 2020 12:19:13 AM | https://www.thehindu.com/news/national/kerala/state-palm-oil-industry-in-jitters/article30488021.ece

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