But the government Import duty unlikely to come down after arrival of domestic crop: Food Secretary
Food secretary Sudhanshu Pandey said on Friday that edible oil prices are likely to soften till December as international commodity futures reflect a fall in prices and arrivals of domestic oilseeds crops. However, he indicated that the government will be constrained by further cuts in import duty to bring down oil prices as it needs to augment its own resources which have been hit by COVID.
Rising global prices and lower domestic production of soybean, India’s largest oilseed crop, led to an increase in retail prices of major edible oils by up to 48% over the previous year. Mr Pandey, however, expressed confidence that the spike is over.
“December futures for Soybean and Palm Oil are showing slight downward trend. So at least we can expect that the prices will not rise further,” Mr. Pandey told reporters, adding that the arrival of domestic soybean crop and mustard crop of Rabi season will also help in bringing down the prices. “Hopefully, prices should remain under control. There will be a decline, but not a very dramatic decline as global commodity pressures still remain.
Officials say that one of the reasons for the jump in global prices is excessive purchase of edible oil by China. Another reason is that many major oil producers are aggressively pursuing biofuel policies and turning to their edible oil crops for that purpose. This includes palm oil in Malaysia and Indonesia as well as soybean in the United States, two types of oil that make up 50% of India’s domestic consumption.
India currently imports about 60% of its edible oil needs, making the country’s retail prices vulnerable to international pressures.
However, government taxes and duties also make up a major part of the retail price of edible oils. Two months ago, the Center slashed import duty on crude palm oil from 15% to 10%, saying the cut would remain in force till the end of September. However, the effective duty, which includes cess and other duties, still stands at 30.25% on crude palm oil and 41.25% on refined palm oil.
Asked if there is a possibility of any further tax cuts, Mr. Pandey merely said that “the pandemic has strained everyone’s resources… and the government also faces hurdles. But still the government which Anything she could do, she did.”
He said government interventions such as duty reduction and port facilities have also ensured that although global soy and palm prices have risen by 22% and 18%, respectively, over the past week, Indian prices have risen by only 2%. has increased. He said the money earned through agriculture cess would be used to actually boost domestic edible oil production and reduce dependence on imports.
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