Edible oil prices begin to cool after govt waives import duty

After petrol and diesel, prices of edible oils, barring mustard oil, have started softening across the country after the government waived basic import duty on crude palm oil, soya bean oil, and crude sunflower oil from 2.5 per cent earlier in a bid to reign in the continuous rise in the cooking oil prices since the past one year.

The agriculture cess on these oils has been brought down from 20 per cent to 7.5 per cent for crude palm oil and 5 per cent for crude soya bean and crude sunflower oil.

Duty on palmolein oil, refined soya bean and refined sunflower oil has been slashed to 17.5 per cent from the current 32.5 per cent.

However, in the case of mustard oil, the low arrival of mustard seeds in the market has kept the prices on the higher side. Besides, the government has also not reduced the duty on rapeseed. The Solvent Extractor’s Association of India (SEAI) has urged the government to reduce import duty on rapeseed in line with other oils.

Mustard oil accounts for over 10 per cent of the domestic consumption basket, saw up to Rs 5 a kg increase in prices, although the government hopes that an increase in mustard acreage could soften prices once the new harvest arrives post-winter.

In the case of other crude edible oils, before reduction, the agricultural infrastructure cess was 20 per cent. Post reduction, the effective duty on crude palm oil will be 8.25 per cent, crude soya bean oil and crude sunflower oil will be 5.5 per cent each.

To control prices of edible oils the government has rationalised import duties on palm oil, sunflower oil, and soya bean oil, futures trading in mustard oil on NCDEX has been suspended and stock limits have been imposed, sources said.

Major edible oils players including Adani Willmar and Ruchi industries have cut wholesale prices by Rs 4 -7 per ltr. Prices have been reduced to give relief to consumers during the festival season.

The other players that have reduced the wholesale prices of edible oils are Gemini Edibles & Fats India, Hyderabad, Modi Naturals, Delhi, Gokul Re-foils and Solvent, Vijay Solvex, Gokul Agro Resources, and N.K Proteins.

Edible prices are higher than a year ago but from October onwards there was a declining trend. The government is taking steps to improve the production of secondary edible oils, especially rice bran oil to reduce the import dependence