New Delhi: Don’t expect your kitchen budget to stabilise anytime soon with the prices of edible oils set to remain high for some time to come.
This is because the Centre has put on hold a proposal to reduce import duties on edible oils even as cooking oil prices have started to fall in the world market after hitting record highs, news agency Reuters reported by quoting government sources.
India, which is the world’s biggest vegetable oil importer, was considering reducing duties after domestic soya oil and palm oil prices more than doubled in the past year, hitting consumers already stung by record fuel prices and reduced incomes amid the COVID-19 pandemic.
“We are not cutting import duties now, a more longer term solution has to be found. Cutting duties is not a sustainable solution,” Reuters quoted an unnamed government official as saying.
A second official, who also requested anonymity, said the decision to leave the import duty structure unchanged was taken as prices were now cooling in the overseas market, pulling the domestic prices lower too.
“The idea is to keep a close watch on international prices and global supplies, and if the situation warrants it, we’ll revive the proposal for a reduction in the duty to protect the interests of both consumers and farmers,” the official said.
Yet even after the recent correction of more than 20%, Indian edible oil prices are still around double their levels a year ago.
Household consumption is expected to decline the longer prices remain elevated.
Demand from bulk buyers like hotels, restaurants and bakeries had already dropped after authorities imposed local lockdowns in response to a devastating second wave of COVID-19 infections over recent months, dealers said.
India meets nearly two-thirds of its edible oil demand through imports, levying a 32.5% duty on palm oil imports, while crude soybean and soya oil are taxed at 35%.
It buys palm oil from Indonesia and Malaysia, and soya oil and sunflower oil come from Argentina, Brazil, Ukraine and Russia.