21/06/2008 (The Financial Express) - New Delhi, Jun 20 The government on Friday announced that edible oils would be sold at subsidised rates through ration shops across 15 states from the next month.

In April, the government had decided to distribute cheap imported edible oil to poorer sections through public distribution system (PDS) for offsetting the impact of spike in domestic prices.

Union agriculture minister Sharad Pawar had then said the government would distribute about 1 million tonne of imported edible oil during 2008-9 at a subisdiy of Rs 15 per kg through state governments at the rate of 1 litre per ration card per month. The subsidy on the oil would be to the tune of Rs 1,500 crore.

According to a ministry of agriculture statement, the public sector procuring agencies such as PEC, MMTC, State Trading Corporation and Nafed have already imported Rs 1.79 lakh tonnes of edible oil of the requirement of 1 million tonne of edibie oil.

The statement said 15 states have desired to participate in the scheme. States including Andhra Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Madhya Pradesh and others have been allocated edibile oil by the department of food and public distribution under the ministry of agriculture.

However, a senior agriculture ministry official had told FE that because of softening of the prices of edible internationally and low subsidy component, the states are not enthusiastic have not been able to shown

“The states also need to incur extra expenditure for storing and distributing the imported edible oil through PDS,” an official with the ministry of agriculture had earlier said.

As large chunk of required oil is yet to be imported, it would beinteresting to see how states would distribute the subsidised oil.

Out of the 12 million tonne of edible oil consumption in the country, more than 5.5 million tonnes is imported. The country imports around 2 million tonnes of soyabean oil from Argentina and Brazil while about 3.5 million tonnes of palm oil is imported annually from Malyasia and Indonesia

The prices of the edible have seen a sharp rise in the last one year due to increase in palm oil prices globally. In a bid to curb rising prices of edible oil, the government in March had announced an import duty cut on crude palm oil from 45 to 20 % and that on refined palm oil from 52.5 to 27.5%.