Measures to abolish import duty on edible oils to reduce inflation


- Commodity Current: Jayavadan Gandhi

Nowadays the rising cost of food items during the Diwali festivities is a headache for the government as well as the situation is getting worse every day with twelve joints and thirteen breaks. In addition to banning futures trading in edible oil, Rayada is now tightening its grip on other oilseeds and oils. The government has imposed stock limits on oilseeds to curb black market. The stock limit has been imposed till March 31, 207. The time limit of the stock limit is based on the current stock and usage. The power to change the stock limit has been delegated to the state governments. However, in some cases, there is a lax policy to relax the rules for importers, exporters, millers and dealers.

The government has abolished import duty on foreign imported oils, especially crude palm oil and crude soybean oil, in a bid to curb the rise in prices of edible oils during the festive season. The government has reduced the duty on refined soybeans, palm oil and refined sunflower to 12.5 per cent. The reduction in agricultural cess has reduced the duty on crude soybean oil from 50 per cent to five per cent, on crude palm oil from 7.5 per cent and on crude sunflower from 20 per cent to five per cent. Reducing import duties is expected to significantly increase the supply of foreign oil in the near future. In September, the country imported 18.5 lakh tonnes of palm oil, a record-breaking 5 per cent increase. Apart from this, the import of inedible oils has also increased and crossed the surface of 4000 tons. The country imports mostly palmolin and crude palm oil from Indonesia and Malaysia. While crude soybean oil is imported from Argentina.

Revenue from crops like soybean and groundnut at the start of the market, import duty as well as announcements of reduction in agricultural cess have affected the prices of the above agricultural products. If prices fall, the benefits to farmers may go down. How much does the above measure bring down oil prices? It is unknown at this time what he will do after leaving the post. About 5 to 20 per cent of the total edible oil requirement in the country is imported from abroad. For the fifth time since last February, the government has been reducing import duties to curb oil prices. Currently, soybean futures are in the range of Rs 300 to Rs 500 and rye in the range of Rs 2,000 to Rs 500.

Guar has also been bullish due to the impact of the rise in crude oil. Guar gum futures have reached the June 2018 high level. Intra-day prices have jumped to 11,000. Has shown a rise of two per cent. The market is expected to produce around 20 to 5 lakh sacks of guar this season. Guar production has halved in the last two to three years. Guar cultivation has come out of the sight of farmers due to non-availability of prices. Farmers are focusing more on groundnut as well as cotton instead of guar. Guar seed futures are also in the range of 2000 to 3100.

Parallel to the unbearable rise in prices of beans and oils, the middle class is being harassed by the red-hot boom in basic items like tomatoes and onions. Onion prices in the wholesale market have gone up by Rs 200 per quintal. Heavy rains this season have caused severe damage to new crops. In addition, the condition of the farmers is deplorable as the stock kept in cold storage is also rotting. Last year, onion exports were banned, but at the request of the Bangladesh government, India immediately allowed the export of 5,000 tonnes of onions on an immediate basis last month. Prices of tomatoes parallel to onions have also turned red, surpassing Rs 40-50 per kg.

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