Oilseed growers in India have urged the government to raise the import tax on palm oil – the most widely used vegetable oil in the country – to help support thousands of local farmers facing a drop in domestic rapeseed prices, Reuters wrote on 10 May.

“We have requested Prime Minister Narendra Modi to personally look into the issue of falling oilseed prices and the need to raise the palm oil import duty,” Rampal Jat, national president of the Kisan Mahapanchayat farmers’ council, told Reuters.

Last year, India abolished the basic import tax on crude palm oil (CPO) but continued with a 5% tax known as the Agriculture Infrastructure and Development Cess on CPO imports, the report said.

India imposes a 12.5% import tax on refined, bleached and deodorised palm oil.

The government also needed to instruct its agencies to buy rapeseed at guaranteed prices, which would provide immediate relief to farmers, Jat added.

Domestic rapeseed prices had dropped to 4,500 rupees (US$55) to 4,700 Indian rupees (INR)/100 kg (US$57/100 kg), lower than the government-set minimum support price of 5,450 INR/100 kg (US$66), Reuters wrote.

“Only last year, most farmers received 8,000 INR [US$97] for their rapeseed crop, so the fall in prices is quite steep,” said Rameshwar Prasad Choudhary, a rapeseed grower from the western state of Rajasthan, which accounts for more than half of India’s rapeseed production.

Lower oilseed prices could force some farmers to switch to other crops, according to Sandeep Bajoria, CEO of Mumbai-based vegetable oil brokerage and consultancy Sunvin Group.

India’s vegetable oil imports cost around US$18bn/year, and Modi has urged farmers to boost oilseed output to cut India’s rising import bill, Reuters wrote.

Industry body the Solvent Extractors’ Association (SEA) of India has estimated this year’s rapeseed output in the country at a record 11.5M tonnes.