Canola tariff keeps oil sales from sizzling

VANCOUVER — Canadian canola oil is having a tough time making inroads into a tantalizing marketplace.

“It’s a real juxtaposition with India because it is a huge vegetable oil consumer, obviously, but there are significant challenges in getting into that market,” said Patti Miller, president of the Canola Council of Canada.

India is the world’s leading importer of vegetable oil. It is expected to buy 10.66 million tonnes of the product in 2012-13, which ranks it just ahead of China’s 9.49 million tonnes.

Miller said the canola industry would like to crack the Indian market, but a myriad of problems stand in the way, including poor infrastructure, government policy and a lack of awareness about the oil’s health benefits.

Adrian Man, Richardson International’s assistant vice-president for Asia Pacific, said India should be a big market for canola oil.

“But there is so much red tape and regulations going into that country,” he said during an interview at the council’s annual meeting.

The council is exploring how it can expand its business in India.

Man said the key impediment is government policy. Canola oil faces a punitive tariff compared to palm oil.

Palm is already the cheaper oil and the tariff differential just exacerbates the difference in price.

India is expected to import eight million tonnes of palm oil in 2012-13 compared to 95,000 tonnes of rapeseed-canola oil.

Man believes the key to selling more canola oil to India is to build awareness about the product’s health benefits among India’s upper and middle classes.

“Then you could see some push from the inside,” he said.

That could be the impetus needed to convince the government to change the country’s tariff structure.

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