Centre Worried Over Continuing Strength In Edible Oil

Mumbai: Mr T. Nand Kumar, Secretary, Ministry of Food and Public Distribution, has summoned industry and trade associations relating to the edible oil sector for a meeting to be held in New Delhi on July 2. Edible oils have a fairly high weightage in the consumer price index. It is clear the Government is worried over maintaining strength in the edible oil market. World prices have soared and domestic production is below expectation. Progressive reductions in customs duty in recent months, especially in palm group of oils, have not helped contain domestic prices as globally the market has been near-record high in the wake of demand from the biodiesel sector.
Across edible oils soyabean, palm, rapeseed and sun the duty could be uniformly brought to 45 per cent. More important, if the Government seeks quick relief from high prices, customs duty on both crude and refined oils should be unified and permitted for import at the same rate of duty. The time lag (window of speculative opportunity) between import of crude oil and marketing of refined oils should be closed. Demand at the lower end of the market is drying up as edible oils have become unaffordable. A sure way to support poor consumers is to quickly restart supply of edible oils through the public distribution system (PDS). The Government's reluctance is intriguing. The domestic oilseed crop prospects will become clear not before mid-August.