New Delhi: The Secretary of the Department of Food and Public Distribution (DFPD) chaired a crucial meeting today with representatives from key edible oil associations, including the Solvent Extraction Association of India (SEAI), the Indian Vegetable Oil Producers’ Association (IVPA), and the Soyabean Oil Producers Association (SOPA). The primary focus of the meeting was to discuss and implement a pricing strategy for edible oils amidst recent changes in import duties.
The Secretary instructed these leading industry associations to ensure that the Maximum Retail Price (MRP) of edible oils remains stable until the availability of stocks imported at the current 0% and 12.5% Basic Customs Duty (BCD) rates. Associations were urged to communicate this directive to their members promptly.
In line with earlier discussions, the edible oil industry had previously reduced the MRP of key oils such as Sunflower Oil, Soyabean Oil, and Mustard Oil. This price reduction was a response to the decline in international oil prices and a decrease in import duties, aimed at easing the financial burden on consumers. The government has consistently advised the industry to align domestic prices with international trends to benefit consumers.
However, effective September 14, 2024, the government has increased the Basic Customs Duty on various edible oils to support domestic oilseed prices. The revised duties are as follows:
- Crude Soybean Oil, Crude Palm Oil, and Crude Sunflower Oil: The Basic Customs Duty has been raised from 0% to 20%, making the effective duty on crude oils 27.5%.
- Refined Palm Oil, Refined Sunflower Oil, and Refined Soybean Oil: The Basic Customs Duty has been increased from 12.5% to 32.5%, resulting in an effective duty of 35.75% on refined oils.
These adjustments are part of the government’s strategy to support domestic oilseed farmers and stabilize the market. With new soybean and groundnut crops expected to hit the markets from October 2024, the increased duties aim to bolster domestic production and provide fair compensation to farmers.
The decision to adjust import duties follows a comprehensive review of global market conditions, including:
- Increased Global Production: There has been a rise in global production of soybean, oil palm, and other oilseeds.
- Higher Global Ending Stocks: Ending stocks of edible oils have increased compared to the previous year.
- Falling Global Prices: Surplus production has led to a decrease in global prices, resulting in a surge of inexpensive oil imports that have pressured domestic prices.
By raising the landed cost of imported edible oils, the government aims to support domestic oilseed prices, enhance local production, and ensure that farmers receive equitable returns for their produce.