Relief to consumers as govt cuts basic import duty on edible oil by 5%

The central government has reduced the basic import duty on edible oils to keep retail prices under control. The ministry of consumer affairs' department of food and public distribution, via a notification, reduced the basic import duty on refined soyabean oil and refined sunflower oil from 17.5% to 12.5% with effect from today. The current order will remain in force till March 31, 2024, says the ministry.

The ministry says the decision is expected to augment the earlier measures taken to reduce the prices of edible oils in the domestic market.

Notably, the basic import duty is an important factor, which impacts the landed cost of edible oils, which in turn affects the domestic prices. "Reduction in import duty on refined sunflower oil and refined soyabean oil will benefit the consumers, as it will help in easing the domestic retail prices," says the ministry.

The import duties on refined soyabean oil and refined sunflower oil were last reduced from 32.5% to 17.5% in October 2021. At that time, the international prices were very high, which was getting reflected in the domestic prices as well.

As per the ministry, the food and public distribution department is closely monitoring the edible oil prices to ensure their adequate availability to consumers.

The central government says to bring down the prices of edible oils, it has cut the basic duty on crude palm oil, crude soyabean oil, and crude sunflower oil from 2.5% to nil. The agri-cess on these oils has been brought to 5%, and this duty has been extended up to March 31, 2024.

Additionally, the government has also extended the free import of refined palm oils. Also, the Centre had issued a notification for the allocation of tariff rate quota (TRQ) for the import of 20 LMT of crude soyabean oil and 20 LMT of crude sunflower oil for FY23 and 20 LMT of crude sunflower oil for FY24 at “zero import duty” and “zero Agriculture Infrastructure & Development Cess”.

Currently, the total demand for edible oil in the country is around 255 LMT, while the total domestic production is around 115 LMT. The gap between the demand and supply of edible oil is met through the import of edible oils of around 140 LMT.

To boost the production in the country, the government is implementing a centrally-sponsored scheme, the National Food Security Mission -- Oilseeds & Oil Palm from FY19 in order to increase the production and productivity of oilseeds.

The Centre had also launched a separate mission for palm oil -- the National Mission for Edible Oils (Oil Palm)-NMEO in 2021 to promote oil palm cultivation for making the country “Atmanirbhar in edible oils”, with a special focus on north-eastern states and Andaman and Nicobar Islands.