The Soybean Processors Association of India (SOPA) has recommended a buffer stock for edible oils to the tune of 10% of the country’s demand. This reserve stock can be released in the market whenever there is crunch in supply due to any factor and will help the government in bringing down the prices, SOPA suggested.
The shortage of edible oil supply from imports due to war between Russia and Ukraine would be approximately be around 2 lakh tonnes of sunflower oil per month, the association said. The association has given suggestions to the government, regarding augmenting edible oil supply and cooling down prices.
According to SOPA, this deficit can be made up by additional import of soybean oil and palm oil. “The all-time high mustard crop will partially offset the shortfall in sunflower oil in the next six months as the additional 40 lakh tonnes of mustard crop will give about 15 lakh tonnes of additional mustard oil, DN Pathak, executive director, SOPA said to Financial Express.
To cool down the prices of edible oils, the association has suggested engaging with Argentina and Indonesia to reduce their export taxes on soybean oil and palm oil, respectively. The government should strictly enforce storage control order on soybean and mustard, to ensure that the oilseeds come into the market for crushing and not cornered by stockists and traders for hoarding and profiteering,” Pathak said.
Expressing the hope for normal supplies to resume in the next three months, Pathak said that the oil import lobby has asked for duty reduction on canola oil. Under the circumstances, it is not necessary to import canola oil at low duty as it will directly affect the farmers and domestic mustard oil industry, he pointed out. Canola oil could also be sold as mustard oil as the two oilseeds come from the same family and it is easy to adulterate mustard oil with canola oil. Any further reduction in duties on edible oils would not be in the long-term interest of the country.