War in Ukraine and Indonesia’s ban on palm oil exports have caused edible oil prices to escalate sharply. The Indian market too has seen an unprecedented rise in the prices of edible oils. To keep the prices in check the Indian government plans to cut taxes on edible oils in India.
Sixty per cent of the edible oils in India are sourced from imports. Hence any change in the supply chain is likely to escalate the prices of edible oils. The prices, which have been rising for the past two years accelerated after Russia invaded Ukraine. But the major factor in the price rise has been the export ban of Indonesian palm oil to protect its domestic market. Indonesia is one of the largest providers of edible oils.
India has tried to reduce prices in the past, including reducing import duties on palm, soybean oil and sunflower oil, and limiting inventory to prevent stocking the oil.
The moves so far have not been effective enough to cut down the rates of oil in the market and people had to buy oil at a very high price which is getting heavy on the common man’s pocket.
But now according to reports, it is said that the government is now considering reducing import duties on crude varieties of canola oil, olive oil, rice bran oil and palm kernel oil from 35% to 5% to help boost domestic supplies.
A finance ministry spokesperson didn’t immediately respond to calls and a text message seeking comment. The agriculture and food ministries also weren’t immediately available to comment on this matter but the common man is hoping to get some relief.