In order to curb rise in prices, the government extended stock holding limits for edible oils and oilseeds till June 30, 2022, while specifying the quantity of stocks retailers, wholesalers and processors can hold.
In October 2021, the government had imposed stock holding limits on edible oils and oilseeds till March 31, 2022. However, the quantities of stock limits of edible oils and oilseeds were left to the state and Union Territories (UTs) to decide on the basis of their respective consumption pattern.
Subsequently, only six states – Uttar Pradesh, Karnataka, Himachal Pradesh, Telangana, Rajasthan and Bihar – had imposed the stock holding limits.
According to new stock holding limits, retailers can hold only up to 30 quintal of edible oils and 100 quintal of oilseeds while wholesalers can hold 500 quintal of edible oils and 2,000 quintal of oilseeds at any given time.
Processors of edible oils would be able to stock 90 days of their storage capacities while processors of oilseeds would be able to stock 90 days production of edible oils as per daily requirement of the production capacity.
Exporters and importers of edible oil have been kept outside the purview of this order with some caveats.
India is dependent on imported edible oils, with around 14 million tonnes (MT) or two-thirds of the total estimated annual consumption of 22 MT met through imports. In 2020-21, India imported 13.35 MT of edible oil, out of which the share of palm oil was around 56%.
Last year as part of import duty rationalisation, the basic duty on RBD palmolein oil was reduced 12.5% from 17.5%. The basic duty on refined soyabean and refined sunflower oil has been slashed to 17.5% from 32.5%. “It was observed that the maximum benefit of rationalisation of duty had not been passed on to the end consumers,” according to the MCAFP statement. According to the ministry of agriculture data, rabi oilseeds crop has been planted in around 10.27 million hectares in 2021-22, which is around 23% more than the last year.