The Solvent Extractors Association of India (SEA) also asked the government to restrict issue of licence for import of palm oil and refined palm oil.
SEA made a representation in this regard to Commerce and Industry Minister Piyush Goyal.
Last week, the government had imposed restrictions on imports of refined palm oil and palmolein in the backdrop of remarks by Malaysia, a major supplier, on the new citizenship law and Kashmir issue.
“We understand from media reports that the government may issue licenses for allowing import of refined palm oils to the state agencies for distribution under the PDS and also to private organisations,” SEA President Atul Chaturvedi said in a letter to Commerce Minister.
“We fear this has potential of opening the floodgates of refined palm oil and palmolein into India if a proper check is not put on the same,” Chaturvedi added.
He said the government’s objective of putting import of refined palm oil and palmolein in “restricted” category would be defeated, which has the potential of destroying local refiners and oilseeds growers.
In order to avoid this scenario, SEA President said the government should cap import of these commodities at a maximum of 50,000 tonnes per month and issue licenses proportionately in different zones to check dumping in one area.
India, the world’s largest importer of vegetable oils, buys nearly 15 million tonnes annually.
Of this, palm oil comprises 9 million tonnes and the rest 6 million tonnes is soybean and sunflower oil.
Indonesia and Malaysia are the two countries which supply palm oil.