Cooking Oil prices likely to ease by December: Food Secretary

Oil prices are likely to come down from December as commodity rates fall, but the government is not going to reduce import duties following the arrival of a new oilseed crop, says Food Secretary Sudhanshu Pandey.

He did indicate that the government would be strained to reduce further import duties as it needs to promote its own resources, which have been impacted by Covid. Over the last few years, the retail prices of major edible oils have increased up to 48%, resulting in a decrease in the production of soyabeans, India's largest oilseed crop. However, Mr. Pandey confirmed that the price hike is over.

As of December, Soyabean and Palm oil prices will decline marginally, so we can at least expect "no more price hikes", Mr. Pandey told reporters. Domestic soybean crops and mustard oil would help to soften the prices, but there won't be a dramatic drop because there is still global pressure. The government taxes and duties are a major factor in the retail price of edible oil. Two months ago, the Centre reduced import duties on palm oil from 15% to 10%. However, effective duties such as cess and other taxes are still 30.25% on crude palm oil and 41.25% on refined palm oil. 

When it was asked whether any further tax cuts are possible in the future, Mr. Pandey noted that ‘Pandemic has affected everyone’s resources’ still the government is trying to make better policies. Furthermore, he said that government interruption of duty reduction and port facilitation has also contributed to a rise in global soyabean and palm oil prices from 22% to 18% last week. India’s prices have only hiked by 2%. Also, the money earned through agricultural cess would be used to encourage domestic edible oil production and reduce dependence on imports.