Avoidable trade practices
The tragedy is this: it stands to reason to believe that India is becoming a dumping ground for palm oil. A part of our imports is merely stock transfer from origin to destination; and we have in this country a few accomplices to play along with overseas suppliers.
Importantly, there is a massive amount of stock building in the country in anticipation of a duty hike, in the hope that policy makers will at some stage succumb to pressure brought on by the trade bodies. If the duty is hiked, it is these speculative interests who will win and reap windfall gains. It is possible that the associations are being guided from behind by these speculative interests.
Importantly again, one does not hear noises against undesirable and wholly avoidable trade practices. Take for instance, the long credit period importers enjoy. The period of 90-150 days is exploited to the hilt to create an unending chain of imports and payments.
Many of the importers here are actually falling into an ‘import debt trap’. Hypothetically, if edible oil imports on credit are stopped today, most importers will face a deep payment crisis; some may go bust.
Last but not the least, it is sad that trade bodies try to extract favours from the government by talking about farmers or using their name. Farmers know to look after themselves and policy makers know how to look after the farmers.
Trade associations must ask themselves what they have done for farmers’ welfare or whether they have done enough.
G Chandrashekhar
Global Agribusiness and Commodity
Sector Specialist
India
