Edible oil associations have been advised by the Indian government to maintain the minimum retail price (MRP) of oil until stocks of edible oil imported at 0% and 12.5% Basic Customs Duty (BCD) are available.

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Pricing Strategy for Edible Oil

Today, the Secretary of the Department of Food and Public Distribution (DFPD) led a meeting with representatives from the Solvent Extraction Association of India (SEA), the Indian Vegetable Oil Producers' Association (IVPA), and the Soybean Oil Producers Association (SOPA) to discuss pricing strategies.

It was recommended to the top edible oil associations to make sure that each type of oil's MRP is maintained until the stocks imported at 0% and 12.5% BCD are depleted. In addition, they were asked to discuss this matter right away with their members.

Previously, the industry had lowered the MRP of oils like sunflower, soybean, and mustard oil after the department had held meetings with major edible oil associations.

These price cuts were brought about by declining global prices as well as lower import duties, which made edible oils more affordable. To ease the burden on consumers, the industry has been advised on a regular basis to match domestic prices with international prices.

In an effort to support domestic oilseed prices, the Indian government raised the basic customs duty on a variety of edible oils.

The basic customs duty on crude palm, crude sunflower, and crude soybean oils has increased from 0% to 20% as of September 14, 2024, making the total effective duty on crude oils 27.5%. Furthermore, the overall effective duty on refined oils is now 35.75% due to the increase in the basic customs duty on refined palm, sunflower, and soybean oils from 12.5% to 32.5%.

The central government is also aware that approximately 30 lakh metric tonnes (LMT) of edible oil stock have been imported at lower duties, which is sufficient for 45 to 50 days of domestic consumption.

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REFERENCE - India Today

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