The Union government has asked edible oil associations to ensure that the MRP of each edible oils such as sunflower oil, soybean oil and mustard oil is maintained till their availability under lower customs duty.
The associations “were advised to ensure that the MRP of each oil is maintained till the availability of edible oil stocks imported at 0% & 12.5% Basic Customs Duty (BCD) and take up the issue with their members immediately,” according to a government statement released after a meeting of Secretary, Department of Food and Public Distribution (DFPD), with the representatives from Solvent Extraction Association of India (SEAI), Indian Vegetable Oil Producers’ Association (IVPA) and Soyabean Oil Producers Association (SOPA).
The government said these adjustments are part of the its ongoing efforts to bolster domestic oilseed farmers, especially with the new soybean and groundnut crops expected to arrive in markets from October 2024.
Last week, India raised the basic import tax on crude and refined edible oils by 20 percentage points, as the world's biggest edible oil importer tries to support local oilseed farmers. The move could lift edible oil prices and dampen demand and subsequently reduce overseas purchases of palm oil, soyoil and sunflower oil.
ALSO READ: Higher import duties on oils effective September 14 to support farmers
Effective from September 14, the Basic Customs Duty on Crude Soybean Oil, Crude Palm Oil, and Crude Sunflower Oil was raised from zero percent to 20 percent, making the effective duty on crude oils to 27.5 percent. Additionally, the Basic Customs Duty on refined palm oil, refined sunflower oil, and refined soybean oil was hiked from 12.5 percent to 32.5 percent making the effective duty on Refined oils as 35.75 percent.
This hike was needed to support domestic oilseed farmers, who were impacted from increased global production of soybean, oil palm, and other oilseeds that led to falling global prices. This situation led to a surge in imports of inexpensive oils, exerting downward pressure on domestic prices.
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