The local oil palm industry has hailed government’s decision to bring back duties on imported vegetable oil, as it has taken out unfair competition which nearly led to major lay-offs in the sector.

Government announced a reduction in the benchmark valuation of imports effective April 4, 2019 – a policy that resulted in a 50 percent slashing of duties on imports of general goods, including vegetable oil. This, according to Executive Secretary of the Oil Palm Development Association – Selorm Quarme, gave importers an unfair advantage over local producers on pricing.

For example, prior to introduction of the benchmark value, a 25-litre (yellow gallon) of oil produced locally was selling at GH¢145 against GH¢150 for the imported product. However, after the policy was introduced, the locally produced vegetable oil was still selling at GH¢145 while the imported products started selling from GH¢110.

But the realignment of taxes which has effectively cancelled the 50 percent tax relief on imported oils, Mr. Quarme says, will keep a lot of jobs that were on the brink of collapsing.

“We were wrapping-up with the lay-off numbers when the news [reversal of the policy] came. We are in challenging times and desperate to save our operations. That is why we decided to lay-off some thousands of workers just as other sectors,” he told the B&FT in an interview.

He further stated that reversal of the policy has come at the right time, especially when the coronavirus pandemic has hit many industries hard and they will need the assistance of government to survive.

“This is the time the sector needs all possible support from government. We have to be able to feed ourselves if the world decides not to export their vegetable oil to us, and this move is one that shows government is listening and acting,” he said.

Mr. Quarme added that reversal of the policy will lead to expansion of the industry and rather create more jobs.

“With this relief, companies will be able to retain, add-on and pay their employees,” he said.