Centre hikes duty on soya oil, but farmers still wait for better price
At a rally in Wardha, Deputy Chief Minister Devendra Fadnavis highlighted the government’s increase in customs duty on imported soyabean oil from 12% to 32% to support local soyabean farmers. Despite this, soyabean prices remain below the MSP, leading to discontent among farmers. Experts suggest that further government interventions, such as MSP procurement or export incentives, may be necessary.
Nagpur: At Prime Minister Narendra Modi’s public rally in Wardha, deputy chief minister Devendra Fadnavis spoke of measures taken for the welfare of farmers by his government. Fadnavis said customs duty on imported soyabean oil has been hiked from 12% to 32% to ensure better rates for soyabean growers of the region.Even after the duty hike over a week ago, rates of soybean remain below the minimum support price (MSP).
The edible oil made out of soybean has got dearer though.The market rates of soyabean are in the range of Rs 4,400 to Rs 4,700 a quintal as against the MSP of Rs 4,892, said a market source. Soybean oil is priced around Rs 125 a kg as against Rs 90 before the duty hike. Oil prices began to rise in anticipation of the duty hike, said sources.Soyabean is the second major crop of Vidarbha after cotton.
As state elections are on the horizon, poor rates may leave the farmers discontented. The government may need to come up with more measures to further elevate the soyabean rates, say market sources and experts. These are the rates of old stock brought in by the farmers. Fresh arrivals are expected after the current season’s harvest by October first week.
New supply normally reduces the market rates of a product, say sources.The government has increased duty on imports of crude soyabean, palm, and sunflower oil. The intention was to increase the domestic rates of both raw material and end product by restricting imports. However, the intended impact has not been seen, say traders and farmers. Roshan Kothari, a director of a private agriculture produce marketing at Wani in Yavatmal district, said the immediate impact of the duty hike has only been on the oil extractors. On a per 10 kg basis, soya oil has gone up to Rs 1,300 from Rs 1,000 earlier. After a brief increase, the soyabean rates have returned to the old level, he said.
Amit Jain, vice-president (procurement) of Abiz IB, a major buyer of soybean, says a lower demand for de-oiled cake (DOC) is keeping the rates low. Soyabean is used to make edible oil as well as DOC, which is used as cattle and poultry feed.Internationally, the rates of DOC are down, keeping down soybean rates as well, he said. Even the ethanol plants are supplying an alternative product using maize.
This has led to maize becoming dearer by around 70%, he said.As the fresh crop arrives, the government needs to come up with more measures. MSP procurement of soyabean can help improve the rate. An export incentive for DOC can be one of them.Bangladesh has been a major market for DOC, but the current situation in that country has affected trade, said another source.
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