Relief for households as edible oil prices set to dip after import duty cut

Time of India

5 days ago

Good news for Indian households. Cooking oil prices are set to decrease. The central government has reduced import duties on crude edible oils. This decision will lead to a 5-6% drop in retail prices within two weeks. Wholesale markets are already showing signs of price softening. Mustard oil prices may also see a reduction.
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In a respite to households, the prices of cooking oils are expected to fall by 5-6 per cent at the retail level over the next two weeks following the central government's decision to reduce import duty on crude edible oils by 10 per cent, officials said on Monday."The edible oil prices that had surged by nearly 17 per cent in recent months are finally showing signs of cooling. We expect it to ease into single digits very soon," Emami Agrotech director and CEO Sudhakar Rao Desai told PTI.For families battling rising food bills, the impact may be felt soon in 'Kirana' (grocery) shops and supermarkets.While the benefit is expected to reflect in retail prices in about a fortnight, the wholesale markets are already showing early signs of softening prices, the executive from the leading branded edible oil manufacturer in eastern India said.The price correction will not be limited to imported oils alone."Even mustard oil, which is not dependent on imports, could see a 3-4 per cent reduction due to the overall downward pressure in the edible oil market," Desai added.Behind the scenes, the policy shift is also giving a fresh lease of life to India's edible oil refining industry. The widened gap between crude and refined oil duties-from 12.5 per cent to 22.5 per cent-has made it significantly more cost-effective for companies to import crude oil and refine it domestically."The 10 per cent duty cut is a game-changer," said Keshab Kumar Halder, Managing Director of Halder Venture Ltd "Domestic retail prices of imported edible oils such as soybean, sunflower, and palm oil are expected to decline gradually. This downward trend is also likely to extend to domestically produced oils like rice bran and mustard oil," the chief of the publicly listed agro firm said."It not only helps consumers but also strengthens the position of Indian manufacturers who were losing out earlier due to unfair competition from duty-free re-exports from countries like Nepal," Halder added.Indian refiners had been squeezed by high input costs and low margins, but the revised duty structure now offers them a clear competitive advantage, he explained."This will lead to better capacity utilisation, improved profit margins, and a stronger domestic refining ecosystem," Halder said.Industry leaders estimate that capacity utilisation across the refining sector could rise by 20-25 per cent, boosting the central government's Make in India initiative and reducing dependence on imported refined oil. PTI