India is known to import huge quantities of edible oils to meet domestic demand. It has over 50 per cent dependency on imports. Recently, the government has instructed edible oil processors to not raise the retail prices. This directive came after it increased import duties. Concerns were raised that the companies might increase the prices of edible oils.
However, the government stated that the company already had sufficient stock of edible oil, which was imported with lower tariffs. The Ministry of Food recently stated that edible oils which were imported at lower tariffs will last easily for 45 to 50 days. They have refrained the companies from increasing the Maximum Retail Price (MRP).
Just last week, the central government increased the basic customs duty on various edible oils to support domestic oilseed prices. From September 14 onwards, the base duty on crude Soyabean oil, crude oil and crude sunflower oil has been raised from zero to 20 per cent. Now the effective duty on crude oil is 27.5 per cent. Additionally, the basic customs duty on refined oil, sunflower oil, and refined Soyabean oil has been hiked from 12.5 per cent to 32.5 per cent, making the effective duty on refined oil 35.75 per cent.
On September 17, Food Secretary, Sanjeev Chopra held a meeting with representatives of the Solvent Extraction Association of India (SEA), the Indian Vegetable Oil Producers’ Association (IVPA) and the Soyabean Oil Producers’ Association (SOPA) to discuss the pricing strategies. An official statement read, “The leading edible oil associations were advised to ensure that the MRP of each oil is maintained till the availability of edible oil stocks imported at zero per cent and 12.5 per cent Basic Customs Duty (BCD) and take up the issue with their members immediately.”
It further added that the centre is aware that about three million tonnes of edible oil imported at lower tariffs are still in stock, which will last for 45 to 50 days for domestic consumption. These directives have been issued to ensure support to domestic oilseed farmers.
