Edible oil prices likely to rise due to increase in import duty

01-Oct-2024 06:55 PM

Mumbai. With the aim of raising the market price of soybean, the Central Government on one hand decided to purchase this important oilseed from farmers in Madhya Pradesh,

Maharashtra, Karnataka and Telangana at the minimum support price (MSP) of Rs 4892 per quintal, while on the other hand it also announced a huge increase of 20 percentage points in the basic import duty on crude and refined edible oils of oil palm, soybean and sunflower.

The government's decision led to a good increase in the wholesale market price of soybean and it has increased to close to the minimum support price and in some places above it, but at the same time there is a possibility of further increase in the price of edible oils, which will increase the difficulties of common consumers. According to a leading industry analyst,

usually after the duty cut in India, the export duty is reduced in the major exporting countries of edible oils, but this time it did not happen and contrary to expectations, a huge jump in the prices of edible oils is being seen in the international market.

This is bound to have a direct impact on the domestic market. High prices may not have much impact on the quantity of import of edible oils if the threat of a sharp increase in its price remains. The government is aware of this reality and therefore it has started looking for alternatives.

Unlike rice, wheat, sugar and pulses, the price of edible oils remained almost stable before 14 September, but now it will not be easy to control the sharp rise in it.

The Commission for Agricultural Costs and Prices (CACP) had suggested making the structure of import duty on edible oils dynamic, which the government can implement.

Generally, the rule is that when the global market price of edible oils is high, then the import duty in India should be reduced and now when it is low,

the duty should be increased so that the price of edible oils imported from abroad in the domestic market does not fall below that of indigenous edible oil. But it seems that this time the government's bet has backfired and the exporting countries are taking full advantage of it.