Demand for zero-rate duty, sales tax on soybean

LAHORE: The poultry industry on Thursday demanded of the government to bring down import duties and sales tax on soybean meal to zero percent so that prices of feeds could be reduced. 

The industry officials said the federal government increased the import duty on soybean meal to 10 percent in the current budget for the fiscal 2015/16 from five percent earlier. This is in addition to 10 percent sales tax.

The import price of soybean meal is $330 to 362/ton, while it is available at Rs63,000/ton (equivalent to approximately $602). 

The viability of solvent extractors to extract oil from soybeans is considered profitable if the meal price is $10/ton lower than the bean price as the 18 percent oil from soybean extraction becomes free of cost and the oil being sold in the local market at Rs 37,500/ton becomes a net profit. 

Oil extraction from soybean requires more than double the foreign exchange than that required if you were to produce the same quantity from soybeans. Canola is usually $10 lower than the international market and sunflower is usually at parity with soybean.

Canola yields 43 percent oil, sunflower (44 percent) and soybeans (18 percent).

The officials said in order to produce 100,000 tons of oil from canola or from sunflower, one will require less than half the foreign exchange than it will require if produce the same quantity of oil from soybeans.