Albeit global prices of edible oils having increased in the past month, the government feels consumers will have to adjust with the market rates as the current import duty structure needs to continue to help the country move towards self sufficiency.
“The government is aware of the spurt in global prices of some edible oils, which is largely driven by dry weather concerns in soyabean-producing Brazil and Argentina. However, the import duty hike has happened recently after many years of zero or low duty regime. The domestic consumers have to adjust with prices,” an official source said.
However, the government has been insisting that the industry not hike prices on oils imported before duty hike was introduced last month, the senior official said. As on October 23, there has been 16 per cent increase in global price of soyabean, 12 per cent in sunflower and 10 per cent in oil palm during the past one month.
The government on September 13 had increased the duty on crude palm, soyabean and sunflower oil to 20 per cent from ‘nil’ and the levy on refined palm, soyabean and sunflower oils to 32.5 per cent from 12.5 per cent. After the revision, the imported crude oils are now levied at 27.5 per cent and refined varieties at 35.75 per cent, both including cess.
Though the Agriculture Ministry favoured a 40 per cent hike, the government finally accepted a 20 per cent hike saying the total duty including cess on refined imported oils comes to nearly 36 per cent.
According to Consumer Affairs Ministry data, the all India average retail price of soyabean oil was ₹137/litre, sunflower ₹142/litre and palm oil ₹123/litre on October 23, as against ₹127/litre, ₹129/litre and ₹110/litre, respectively a month ago, which shows an increase of ₹10-13/litre. Mustard oil is selling at an average ₹164/litre as against ₹151/litre a month back.
The Solvent Extractors Association of India (SEA) recently said that it has asked its members not to increase the prices of older stock and to maintain retail prices at the pre-September 14 levels.
‘Anticipated a dip’
SEA President Sanjeev Asthana said that the association anticipated a decrease in international export prices following the increase in import duties on edible oils. “However, contrary to expectations, global prices have risen due to supply shortages, further driving up import costs. The Food Ministry has expressed concern over the rising prices, particularly for stock imported at lower duties, he said, adding SEA had already issued an advisory to its members, urging them not to increase the prices of older stock and to maintain retail prices at pre-September 14 levels,” he said in a statement.