There has been an increase in the prices of edible oil during the current festive season. According to media reports, there has been an increase of 37 percent in the prices of palm oil in the last one month. Due to which the domestic budget has been affected. Also, the cost of restaurants, hotels and sweet shops, which use oil to prepare snacks, has increased. The price of mustard oil, commonly used in households, has seen an increase of 29 percent in the same period.
Why did it increase?
This increase in oil prices has come when retail inflation reached a 9-month high of 5.5 percent in September due to high prices of vegetables and food items. After which the possibility of reduction in interest rates by the Reserve Bank of India has reduced. Last month, the government had increased the import duty on crude soybean, palm and sunflower oil, due to which the prices increased. From September 14, the import duty on crude palm, soybean and sunflower oil was increased from 5.5 percent to 27.5 percent and on refined edible oil from 13.7 percent to 35.7 percent.
Global prices rise
Officials have said that global prices of crude palm, soybean and sunflower oil have increased by about 10.6 percent, 16.8 percent and 12.3 percent respectively in the last month. India imports about 58 percent of its edible oil demand and is the second largest consumer and largest importer of vegetable oils. Consumers may have to face higher prices for the next few months as the chances of reducing import duties appear slim. The government had earlier said these adjustments are part of the government’s ongoing efforts to promote domestic oilseed farmers, especially as the new soybean and groundnut crops are expected to hit the markets from October 2024.
encourage local farmers
Industry sources agree that it is necessary to maintain the existing import duty regime to ensure that farmers get good prices for oilseeds. TOI quoted Solvent Extractors Association (SEA) executive director BV Mehta as saying that if we want to make ourselves self-reliant in edible oil, we will have to encourage farmers to produce more oilseeds. This will happen only when farmers get good prices for years and we do not import additional oil. The unexpected increase in global prices of major edible oils has affected the prices of all edible oils. The government increased global production while increasing the duty. etc. were considered.
