India Discusses Edible Oil Prices with Industry Leaders
A meeting was held in New Delhi between the secretary of the Department of Food and Public Distribution and representatives from various edible oil industry bodies, including the Solvent Extraction Association of India (SEAI), Indian Vegetable Oil Producers’ Association (IVPA), and Soyabean Oil Producers Association (SOPA). They discussed strategies for pricing edible oils.
The associations were advised to maintain the Maximum Retail Price (MRP) of each oil until the stocks of edible oil imported at low duty are available. This issue was to be addressed with their members immediately. Previously, the MRP of oils like sunflower, soybean, and mustard oil had been reduced following government requests due to lower international prices and reduced import duties.
Last week, the government increased the Basic Customs Duty on various edible oils to support domestic oilseed prices. Effective from September 14, 2024, the duty on Crude Soybean Oil, Crude Palm Oil, and Crude Sunflower Oil was raised from 0% to 20%, making the effective duty 27.5%. The duty on Refined Palm Oil, Refined Sunflower Oil, and Refined Soybean Oil was increased from 12.5% to 32.5%, making the effective duty 35.75%.
These measures aim to support domestic oilseed farmers, especially with new soybean and groundnut crops expected in October 2024. The decision was influenced by increased global production, higher global ending stocks, and falling global prices due to surplus production. The government stated that these measures would help enhance domestic oilseed prices and ensure fair compensation for farmers.
India, the world’s second-largest consumer and leading vegetable oil importer, meets over 60% of its needs through imports, mainly from Indonesia and Malaysia. Despite growth in domestic oilseed production, it has not kept pace with consumption, leading to continued reliance on imports.
Doubts Revealed
Edible Oil -: Edible oil is the oil we use for cooking, like sunflower oil or mustard oil.
Department of Food and Public Distribution -: This is a part of the Indian government that makes sure people have enough food and other important things.
MRP -: MRP stands for Maximum Retail Price, which is the highest price you can charge for a product in India.
Basic Customs Duty -: This is a tax that the government charges on goods coming into the country from other countries.
Domestic Farmers -: These are farmers in India who grow crops and produce food within the country.
Vegetable Oil Importer -: This means India buys a lot of vegetable oil from other countries because it doesn’t make enough on its own.
