A new picture has emerged regarding the provisions related to animal feed and soybean oil in the first phase of the India-US trade agreement. The government has clarified that the US has been given very limited concessions on dry grain-based animal feed. This rebate is quota based and covers only a small portion of total domestic consumption. Due to this, the possibility of major impact on the market and farmers is being said to be less.
According to officials, India has given duty concession only up to 5 lakh tonnes on DDGS i.e. dry grain based animal feed. The total consumption of animal feed in the country is about 500 lakh tonnes. According to this, the American quota is only one percent. The government says this import will help meet the domestic shortfall and keep the cost of fodder stable.
Preparation to reduce pressure on domestic market
Officials said limited import of DDGS will reduce pressure on raw materials like corn and soybean. This will reduce the need to convert human-edible grains into animal feed. Poultry, dairy, aquaculture and animal husbandry sectors are expected to get relief from cost fluctuations. The government believes that this can also help in controlling food inflation.
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Imports happened earlier also due to increasing demand
Due to increase in demand in the last few years, India has had to import animal feed and related products. In the year 2021, due to domestic price pressure, about 15 lakh tonnes of soybean meal was imported. More than six lakh tonnes of animal feed came from Sri Lanka, China, America, Thailand and Nepal. Apart from this, maize has also been imported from Myanmar, Ukraine, Singapore and UAE and soybean from African countries.
Industry alert on soybean oil and fodder
The draft trade agreement has been cautiously welcomed by the edible oil and soybean processing industry. Under the agreement, America will reduce the duty on Indian goods from 50 percent to 18 percent. In return, India will reduce or eliminate tariffs on US industrial goods, soybean oil, animal feed, walnuts and some fruits. However, the industry is waiting for clear details on tariff reduction, quota system and quality standards.
Questions on price and GM products
Solvent Extractors Association of India said that India is largely dependent on imports for soybean oil, so this move could also be an opportunity. Currently, oil coming from America is expensive due to duty and comes at a price of 30 to 40 dollars per ton more than that from Argentina. Industry organizations also said that it is not yet clear what stance the government will take on genetically modified and non-GM products.
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