In a bid to curb the rise in prices, the government on Thursday extended stock limits on edible oils and oilseeds till December 31, 2022.
“The decision was taken after deliberations at the highest level on the upward price trends of all edible oils owing to the current geopolitical situations across the globe,” according to a statement by the Ministry of Consumer Affairs, Food and Public Distribution (MCAFP).
The MCAFP statement noted that pressure on sunflower oil supplies from Ukraine has had a rub-on effect on the export policy of Indonesia, affecting palm oil imports. “It was compounded by crop loss concerns in South America, impacting soybean oil supplies due to which the international prices of soyabean oil has shown a large upward trend,” the statement noted.
“These measures are expected to curtail any unfair practices like hoarding, black marketing etc. in the market and would help in controlling the prices of edible oils and also ensuring that maximum benefit of the duty reduction is passed on to the end consumers,” according to the statement.
In October 2021, the government had imposed stock holding limits on edible oils and oilseeds till March 31, 2022. However, the quantities of stock limits of edible oils and oilseeds were left to the state and Union Territories to decide based on their respective consumption pattern.
Subsequently, only six states – Uttar Pradesh, Karnataka, Himachal Pradesh, Telangana, Rajasthan and Bihar – had imposed the stock holding limits.In a subsequent notification in February 2022, the Centre has notified the limits for the volumes of stocks held by traders, wholesalers and retailers in those states except those who have already imposed stock holding limits for bringing down prices of edible oils.
According to new stock holding limits, retailers can hold only up to 30 quintal of edible oils and 100 quintal of oilseeds while wholesalers can hold 500 quintal of edible oils and 2,000 quintal of oilseeds at any given time.
Processors of edible oils would be able to stock 90 days of their storage capacities while processors of oilseeds would be able to stock 90 days of production of edible oils as per the daily requirement of the production capacity.
India is dependent on imported edible oils, with around 14 million tonne (MT) or two-thirds of the total estimated annual consumption of 22 MT met through imports. In 2020-21, India imported 13.35 mt of edible oil, out of which the share of palm oil was around 56%.