Reduce rates of edible oil immediately, Centre tells makers
05/05/2023 (The Hindustan Times) - The Centre on Thursday reviewed edible-oil prices, asking sellers and processors to cut retail rates immediately.
The Union government on Thursday reviewed edible-oil prices, asking sellers and processors to cut retail rates immediately and pass on the benefits of a steady fall in global rates to all types of domestic consumers, especially households, officials said.
Cooking-oil makers have cut prices from their peak levels in 2022, when the Ukraine conflict squeezed supplies, but they still remain elevated. On Thursday, food secretary Sanjeev Chopra met representatives of the Solvent Extraction Association of India (SEAI) and Indian Vegetable Oil Producers’ Association (IVPA), which cover most edible oil producers and brands.
Mother Dairy-owned popular oil brand Dhara has decided to cut prices by ₹15-20 across variants with immediate effect and the new rates should take effect in general stores by next week, a spokesperson of the firm said. More brands are expected to follow suit.
To be sure, there was no official intervention in the markets to cap prices as such, but the top bureaucrat said maximum retail prices (MRPs) need to come down quickly. Such meetings with industry representatives help to convey the government’s stance. They also send a signal to producers and refiners, who can be subjected to tighter provisions, such as those under the Essential Commodities Act.
India imports up to two-thirds of its edible oil demand and four key oils – palm, soya, mustard and sunflower – account for nearly 90% of the total consumption in India. The country is the world’s largest palm-oil importer and relies on Indonesia and Malaysia to meet its demand.
Edible oil associations were advised to convey the government’s concerns about prices to their members, or oil makers, and ensure that the MRP of each oil type should go down in tandem with international rates, an official said.
Prices set for distributors by manufacturers and refiners also need to be reduced so that the “price decline is not diluted in any way”, a second official said.
Representatives of oil makers who participated in the meeting said global prices of different edible oils had declined by $200-250 per tonne over the last two months. However, the impact of lower prices takes time to be transmitted to retail markets, according to a member. The cooking oil industry assured the government that consumer prices have come down from their peaks and are expected to come down further shortly.
Consumer inflation slid to the lowest level since December 2021 in March 2023, falling back into the central bank’s target range for the first time in three months at 5.66%. Prices of oils and fats declined 7.86%, against a decline of 0.49% in February.
“The industry is making all efforts to have reasonable retail prices. Prices of all edible oils have come down globally. Therefore, we have requested the government to consider raising customs duty, which had been lowered, by at least 20% to make exports viable,” Davish Jain of The Soyabean Processors’ Association of India said.