The government recently increased import duty on edible oil. Following that, edible oil processors were asked not to increase the retail price. The reason for this is the availability of sufficient stocks of edible oil shipped at low prices. The Food Ministry said that the stocks imported at low duty will easily last for 45-50 days and hence processors should avoid increasing the maximum retail price i.e. MRP. Last week, the Centre had increased basic customs duty on various edible oils to support domestic oilseed prices.
The government had raised taxes.
Starting from the 14th of this month, the basic customs duty on crude soybean oil, crude palm oil and crude sunflower oil has been increased from zero to 20 percent. With this, the effective duty on crude oil has been raised to 27.5 percent. In addition, the basic customs duty on refined palm oil, refined sunflower oil and refined soybean oil has been raised from 12.5 percent to 32.5 percent, bringing the effective duty on refined oils to 35.75 percent.
There is no shortage of stock
On Tuesday, Food Secretary Sanjeev Chopra chaired a meeting with representatives of Solvent Extraction Association of India (SEA), Indian Vegetable Oil Producers Association (IVPA) and Soya Bean Oil Producers Association (SOPA) to discuss the pricing strategy. A government statement said that major edible oil associations have been advised to ensure that MRP of each oil is maintained till stocks of imported edible oils at 0 per cent and 12.5 per cent basic customs duty (BCD) are available and this issue should be immediately raised with our members.
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Stock will last 45 to 50 days.
The central government is also aware that there is a stock of around 30 lakh tonnes of imported edible oils at low duty, which is sufficient for 45 to 50 days of domestic consumption, the statement said. India imports edible oils in large quantities to meet domestic demand. Dependence on imports is more than 50 per cent of the total requirement. The food ministry said the decision to increase import duty is part of the government’s ongoing efforts to promote domestic oilseed farmers. This step has been taken especially in view of the new crops of soybean and groundnut that will hit the markets from October 2024.
