Prices of edible oils likely to rise due to increase in import duty

26-Sep-2024 04:35 PM

Mumbai. The Indian government's decision to increase the basic customs duty by 20 percentage points on crude and refined palm oil, soybean oil and sunflower oil has started having a positive impact on the domestic market price, while its prices are expected to increase further in the coming months.

According to industry analysts, the duty hike is unlikely to have any significant impact on the import quantity of edible oils, but due to the increase in the cost of imported oil, its domestic market price will go up.

It is worth mentioning that 55-60 percent of the demand and need of edible oil in India is met through imports from abroad.

After about two and a half years, the government has increased the basic import duty on edible oils. As a result, the total actual or effective import duty on crude category edible oils has now increased from 5.5 percent to 27.5 percent.

According to a rating agency, due to the increase in customs duty, the import cost of edible oils will increase by about 20 percent and its burden will be directly put on the consumers.

Although the high price of edible oils is likely to increase the price of oilseeds as crushing-processing units may try to buy it from farmers at higher prices, but consumers will face difficulties.

The government has asked edible oil companies not to increase the price of their brands in the near future.

It says that the stock of edible oils imported earlier at a low level duty is sufficient to meet domestic demand and consumption for the next two months.

Prices should be kept stable until that stock is completely sold. The oil industry is assuring the government of this, so it seems that the price of oils will increase only in the second half of the current financial year.