Edible oil prices are likely to remain elevated till the arrival of new crop in the October-November period. Oils like mustard, groundnut or palm, consumed domestically, and commercially used soybean and sunflower oils have seen a sharp rise in prices in the last six months despite government efforts to cool off rates by reducing high tax levies.
The rates are unlikely to come down anytime soon as India meets more than half of domestic demand through imports, BV Mehta, executive director, Solvent Extractors Association of India (SEA) said.
Meanwhile India’s Prime Minister Narendra Modi has announced a National Edible Oil Mission-Oil Palm (NMEO-OP) to make India self-sufficient in cooking oils, including palm oil, as he stressed on reducing the dependence on imports.
Addressing a virtual event on PM-Kisan scheme, he said over Rs 11,000 crore will be invested in the edible oil ecosystem. Modi stressed India must become self reliant in edible oil too as he announced NMEO-OP.
India is dependent on imports of edible oil to meet the domestic demand. Of the total imports, palm oil constitutes about 55 per cent. The country has spent thousands of crores of rupees on edible oil imports, Modi said, and added that this money rather should go to farmers. The Prime Minister said north-eastern states and Andaman and Nicobar Islands could be promoted for palm farming.
Average prices of edible oils in retail markets have increased by up to 52 % in July compared to the year-ago period, according to official data. The average monthly retail prices of groundnut oil increased by 19.24 % in July over the same month last year. Prices of mustard oil have increased by 39.03 %, vanaspati by 46.01%, soya oil by 48.07%, sunflower oil by 51.62% and palm oil by 44.42% during the period under review.
To soften the prices of edible oils, the duty on Crude Palm Oil (CPO) has been cut by 5% from 30 June 2021 until 30 September 2021. The duty on Refined palm oil/Palmolein has been reduced to 37.5% from 45%. Further, a revised import policy for Refined Bleached Deodorized (RBD) palm oil and RBD palmolein has been put in place from June 30, 2021 under which these items have been shifted from the restricted to the free category.