NEW DELHI: No relief for consumers as global prices of edible oils spike
Consumers will face higher edible oil prices in the coming months due to increased global rates and rising import duties. The Indian government aims for self-sufficiency by ensuring better prices for oilseeds. Import duties on crude palm, soybean, and sunflower oils have increased significantly, impacting prices, as India currently meets around 60% of its edible oil demand through imports.
NEW DELHI: Consumers will have to live with the increase in edible oil prices for the next few months as there has been a spike in global prices after the government increased import duties on inbound shipments. Government sources said there is hardly any chance of reducing the import duty and this would continue to help the country move towards self-sufficiency in edible oil.
Industry sources also said farmers need to get a good price for oilseeds, and for that, the current regime of import duty needs to continue.The government has increased import duties on crude palm, soybean, and sunflower to 27.5% from 5.5%. The duty on refined edible oil has also been raised to 35.75% from 13.75%.The global prices of crude palm, soybean, and sunflower have risen by approximately 10.6%, 16.8%, and 12.3%, respectively, in the last one month. These three oils constitute the major share of the country’s edible oil import basket. At present, India meets around 60% of its edible oil demand through imports.
As per Solvent Extractors Association of India (SEA), land prices of crude palm, soybean and sunflower on Thursday were $1,145, $1,160 and $1,165 per tonne, respectively. This is an increase of 32%, 18% and 26%, respectively, compared to last year.The data collated by the price monitoring cell of the consumer affairs department show that the modal or most common prices across centres of mustard, sunflower and soybean increased to Rs 181, Rs 148 and Rs 143 per litre, respectively, on Thursday. Before the hike in import duty on Sept 16, the per litre modal prices of mustard, sunflower, and soybean were Rs 135, Rs 126, and Rs 143. Prices of mustard oil have gone up despite India not importing any of it due to increase in prices of other edible oils. “When there is price pressure on the other major edible oils, it’s bound to have an impact on the entire basket,” said a government official. India is the world’s second-largest consumer of edible oil and the biggest importer of vegetable oil.BV Mehta, executive director of SEA, said that while the immediate price rise seems significant, there has been very little change if seen across the past few years. “If we want to make ourselves self-sufficient in edible oil, we have to encourage farmers to bring more areas under oilseeds. That will happen only when farmers get good prices for years and we don’t go for excess import of oil.”
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