India imports a huge amount of edible oils to meet domestic demand. More than 50 percent of the dependence on edible oil is from imports. Recently, the government has directed edible oil companies not to increase retail prices. This instruction has come after the import duty was increased. Concerns have also been raised that companies may increase the prices of edible oils.
On this matter, the central government says that the companies already had sufficient stock of edible oil available. It was imported at a low tariff. Recently, the Food Ministry has said that the edible oil imported at a low tariff can easily last for 45 to 50 days. After this, the companies have been stopped from increasing the MRP i.e. maximum retail price.
Let us tell you that the central government had increased the basic customs duty on edible oils last week to support the prices of domestic oilseeds. On September 14, the government had increased the basic duty on crude soybean oil, crude oil and crude sunflower oil from zero to 20 percent. Now this duty on crude oil has increased to 27.5 percent. Apart from this, the basic customs duty on refined oil, sunflower oil and refined soybean oil has been increased from 12.5 percent to 32.5 percent, making the effective duty on refined oil 35.75 percent.
On September 17, Food Secretary Sanjiv Chopra held a meeting with representatives of the Solvent Extraction Association of India (SEA), Indian Vegetable Oil Producers Association (IVPA) and Soybean Oil Producers Association (SOPA) to discuss pricing strategies.
“Major edible oil associations have been advised to ensure that the MRP of each oil is maintained at zero per cent and 12.5 per cent basic customs duty (BCD) till availability of imported edible oil stocks and take up the issue with their members immediately,” an official statement said.
It further said that the Centre is aware that about 30 lakh tonnes of edible oil imported at low tariff is still in stock, which will last for 45 to 50 days for domestic consumption. These instructions have been issued to ensure assistance to domestic oilseed farmers.
