The Centre has advised the leading edible oil associations to ensure that the MRP of each oil is maintained till the availability of edible oil stocks imported at 0% & 12.5% Basic Customs Duty (BCD) and take up the issue with their members immediately.
The advice from the government came at a meeting chaired by the Secretary, Department of Food and Public Distribution (DFPD) with the Representatives from Solvent Extraction Association of India (SEAI), Indian Vegetable Oil Producers’ Association (IVPA) and Soyabean Oil Producers Association (SOPA) to discuss the pricing strategy.
It is to be noted that earlier too, in pursuant to the department’s meetings with leading edible oil associations, the MRP of edible oils such as sunflower oil, soyabean oil and mustard oil were reduced by the industry.
The reduction in oil prices had come in the wake of reduced international prices and import duty on edible oils making them cheaper.
The industry has been advised from time to time to align the domestic prices with the international prices so as to reduce the burden on the consumers.
The government has implemented an increase in the Basic Customs Duty on various edible oils to support domestic oilseed prices. Effective from September 14, 2024, the Basic Customs Duty on Crude Soybean Oil, Crude Palm Oil, and Crude Sunflower Oil has been raised from 0% to 20%, making the effective duty on crude oils to 27.5%.
Additionally, the Basic Customs Duty on refined palm, sunflower and soybean oil has been increased from 12.5% to 32.5% making the effective duty on Refined oils as 35.75%.
The Ministry of Consumer Affairs, in a statement, said that the decision follows comprehensive deliberations and is influenced by several factors: increased global production of soybean, oil palm, and other oilseeds; higher global ending stocks of edible oils compared to last year; and falling global prices due to surplus production.
This situation has led to a surge in imports of inexpensive oils, exerting downward pressure on domestic prices.
The Central government is also aware that there is close to 30 LMT stock of edible oils imported at lower duty which is sufficient for 45 to 50 days domestic consumption, the ministry highlighted.