Govt slashes import duty on edible oils to ease prices for consumers

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KEY STORY

  • The government in a notification issued on Friday reduced the duty on crude palm oil, crude soyabean oil and crude sunflower oil to 2.5% with effect from Saturday. The standard rate of duty on refined palm oils, refined soyabean oil and refined sunflower oil has been reduced to 32.5%. The Agri-cess for crude palm oil has been increased from 17.5% to 20%.
  • The Ministry of Consumer Affairs, Food & Public Distribution in a statement said the international prices and thereby domestic prices of edible oils have been ruling high during 2021-22 which is a cause of serious concern from inflation as well as consumer’s point of view.
  • Import duty on edible oils is one of the important factors that impacted landed cost of edible oils and thereby domestic prices. In order to mitigate the rise in these prices, government had taken series of steps between February 2021 and August 2021.
  • The Ministry said between February and August, it reduced the standard duty on crude palm oil to 10% from June 30 till September 30, 2021. This was reduced to 2.5% on Saturday.
  • The duty cuts already made amount to an estimated Rs 3,500 crore in a full year. With the currently reduced import duty worth Rs 1100 crore in  full year, total direct value of benefits expected to be passed on to the consumers, in terms of duties given up by Government, is Rs 4600 crore, it added.
  • The effective duty on crude palm oil, crude soy oil and crude sunflower oil will come down to 24.75% and the effective duty on refined palm oil, soy oil, and sunflower oil will be 37.5%. According to industry insiders, this will bring impact retail prices by Rs 2-3 per litre.

CONCLUSION

  • The Centre earlier asked states to issue directions to stockists of oilseeds and edible oils, millers and refiners to declare their stocks. It also asked states to verify the stocks declared by these middlemen.
  • This is being done to prevent hoarding. However, unlike in the case of pulses where the Centre has put a limit on the stock that a retailer and wholesaler or stockists can keep in store at any point of time, the Centre said there is no such plan to set limit on stocks of oilseeds and edible oil.

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