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Learning from the fact that BJP did not get a clear majority in the Lok Sabha elections, the government does not want to take any risk in the assembly elections of both the states.
Therefore, the Center is taking farmer-oriented decisions one after the other to satisfy the farmer voters. For example, last Friday, the government decided to impose import duty on edible oils so that oilseed producing farmers can get a better price in the Kharif season. This decision has been taken because the price is currently lower than the MSP. However, this has created a situation that while this decision will benefit the farmers, the public is bearing the brunt of the sharp increase in the price of edible oils. On the other hand, in order not to blame itself for such a situation, the central government called a meeting of edible oil producers on Wednesday and requested them not to increase the price of edible oils. However, the public is well aware that since the Teliya Rajas have close ties with the government, they are no one's relations and it is the turn of the public to get angry.
The government has called this meeting only for formality and assured the edible oil processors of sufficient stock at low rates. That is, before increasing the duty, the government has tried to convince the oil kings that imported oil is available in sufficient quantity at low rates. The MRP of each oil is maintained at zero percent and 12.5 percent basic customs duty (BCD) till the availability of stock of imported edible oil.
Last week, the Centre implemented a hike in basic customs duty on various edible oils to support domestic oilseed prices. The basic customs duty on crude soybean oil, crude palm oil and crude sunflower oil has been increased from zero to 20 per cent from September 14, 2024. Which has increased the applicable duty on crude oil to 27.5 per cent. Additionally, the basic customs duty on refined palm oil, refined sunflower oil and refined soybean oil has been increased from 12.5 per cent to 32.5 per cent. Which has increased the effective duty on refined oil to 35.75 per cent. On Tuesday, Food Secretary Sanjeev Chopra chaired a meeting with representatives of Solvent Extraction Association of India (SEA), Indian Vegetable Oil Producers Association (IVPA) and Soybean Oil Producers Association (SOPA) to discuss the pricing strategy. In which major edible oil associations were advised to ensure that retail prices of edible oil remain stable. The meeting said that the associations should also raise this issue with their members. The government is also aware that there is a stock of about 30 lakh tonnes of edible oil imported at low duty, which is sufficient for 45 to 50 days of domestic consumption. India imports a large amount of edible oil to meet domestic demand. The dependence on imports is more than 50 percent of the total requirement. The decision to increase import duty is part of the government's ongoing efforts to promote local oilseed farmers.
The Food Ministry defended the decision to increase import duty, saying that there has been an increase in imports of cheap oil in the country, which puts pressure on domestic prices. By increasing the landed cost of imported edible oils, these measures are aimed at increasing the prices of domestic oilseeds, supporting increased production and ensuring justice to farmers.
Edible oil prices rose by 17 per cent in the week following the duty hike
Last week, the central government had increased the basic customs duty on imported edible oils. Due to the increase in duty, the price of imported oil has increased by 10-17 percent. On September 12, the price of a 15 kg can of soybean oil was Rs 10. Which was Rs 1,850 till September 19. It was increased by Rs 200. The price has been kept at Rs 2,050. Similarly, the price of a can of palm oil is Rs 10. It was Rs 1,750. It was increased by Rs 300. 2,050 and sunflower oil Rs. 1,780 as against Rs. 220. It has reached Rs. 2,000. Since Singtel is produced locally, no increase has been recorded in its price.
Indonesia to consider reducing export duty on palm oil
Indonesia is considering reducing the export duty on palm oil so that its exports are not affected by India's increase in duty on import of edible oil. It is worth mentioning that India meets a large part of its edible oil requirement by importing from Indonesia. So obviously if Indonesia reduces the duty on exports in this way, then India will benefit, but this move of Indonesia can reduce the impact of the Indian government increasing the duty on import of edible oil for the benefit of farmers. Now it remains to be seen how much Indonesia reduces the duty. Indonesia will implement the decision from the beginning of next month to support its farmers due to the fall in demand. Palm oil production in Indonesia is expected to decline to 53 million tonnes compared to 54.8 million tonnes last year. Production fell to 26.2 million tonnes in the first half of this year. Which was recorded at 27.3 million tonnes in the same period last year. Palm oil exports to Indonesia fell to 15.1 million tonnes in the first half of this year. Which was 16.3 million tonnes last year. Indonesia's palm oil exports fell due to reduced demand in China and India. Last year, Indonesia exported about 32.2 million tonnes of palm oil to India, China, the European Union, Pakistan and Africa.