Hyderabad: The Secretary, Department of Food and Public Distribution (DFPD) chaired a meeting with the representatives from Solvent Extraction Association of India (SEAI), Indian Vegetable Oil Producers’ Association (IVPA) and soybean Oil Producers Association (SOPA) here today to discuss the pricing strategy.
The leading edible oil associations were advised to ensure that the MRP of each oil is maintained till the availability of edible oil stocks imported at 0 per cent and 12.5 per cent Basic Customs Duty (BCD) and take up the issue with their members immediately.
Earlier also, in pursuance of the department’s meetings with leading edible oil associations, the MRP of edible oils such as sunflower oil, soybean oil and mustard oil were reduced by the industry. The reduction in oil prices had come in the wake of reduction of international prices and reduced 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 Central government has implemented an increase in the BCD on various edible oils to support domestic oilseed prices. Effective September 14, 2024, the BCD on crude soybean oil, crude palm oil, and crude sunflower oil has been raised from 0 per cent to 20 per cent, making the effective duty on crude oils to 27.5 per cent.
Additionally, the BCD on refined palm oil, refined sunflower oil, and refined soybean oil has been increased from 12.5 per cent to 32.5 per cent making the effective duty on refined oils as 35.75 per cent. These adjustments are part of the government's ongoing efforts to bolster domestic oil seed farmers, especially with the new soybean and groundnut crops expected to arrive in markets from October 2024.
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. By raising the landed cost of imported edible oils, these measures aim to enhance domestic oilseed prices, support increased production, and ensure that farmers receive fair compensation for their produce. 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.