Struggling with supply disruptions of food commodities next imposition of Vital Commodities Act (ECA) in the wake of the nationwide lockdown, the edible oil processors have asked for the government to exempt producing units from the restiction.

The trade system elevated the situation of clubbing clearing and forwarding agent (CFA) depots with wholesale or distributor depots, which is squeezing the provides of important commodities, in particular edible oils. It claimed the limitations could result in “adverse effects on stop-consumers due to the fact the supply of edible oil will get drastically restricted and outcome in supply-chain inefficiencies.”

In a letter to the Union Household Secretary and other departments, the Solvent Extractors’ Affiliation of India (SEA) on Thursday highlighted the simple problems confronted by the processors and their CFA next the imposition of the ECA, which mandates shares limits on storage of important commodities.

The Condition authorities handle these CFAs at element with wholesale sellers or distributors and impose stock limits on them with lawful complications.

As per the established practice of the companies, a production facility is situated in a handful of States and use needs are met by protecting a number of storage depots or clearing & forwarding hubs at distinctive places/States. These depots are both operated instantly by the manufacturer or by their clearing & forwarding brokers (CFAs).

“The CFA depot or hub is not a wholesale dealer nor a distributor but an prolonged arm of the manufacturer, and consequently, CFAs need to be regarded as as manufacturer’s depots. The stock limits meant for wholesale sellers and distributors are very likely to be misapplied to edible oil manufacturer’s depot operated CFAs.” Atul Chaturvedi, President, SEA claimed in the letter.

Plea for exemption

The SEA asked for Centre that edible oil companies and other companies of important merchandise, CFA depots and storage places, owned or controlled by the companies, be exempted from any stock limits that could be imposed underneath the ECA by the respective Condition governments.