NEW DELHI: In any case, India’s import bill on account of vegetable oils is going to increase to US$ 14 billion in the current financial year, against US$ 10 billion in 2014-15.
On the eve of Diwali and other festivals, the government is caught in a Catch-22 situation in balancing consumers’ interest with welfare of farmers who would like more protection by way of increased import duty but any such move may raise the risk of retail inflation, an ASSOCHAM study has pointed out.
In any case, India’s import bill on account of vegetable oils is going to increase to US$ 14 billion in the current financial year, against US$ 10 billion in 2014-15.
“Due to weak global prices and glut in the international markets, prices in India have remained subdued despite a severe shortage of domestic production. For the September, the CPI (consumer price index) marked annualized increase of only 3.6% in the Oils and Fats segment. The situation in edible oil imports is somewhat similar to the crude auto oil. However, unlike the auto fuel segment, the subdued prices have hit interest of farmers, while consumers have benefitted.”
So far the government has raised the customs duty on crude and refined edible oils to 12.5% and 20% respectively. While there is a demand for more such protection for the farmers, the move may lead to spiral in consumer inflation, which the government can ill-afford, learning from the pulses experience.In the case of pulses, the supply-demand situation at the global level was equally bad in sync with the Indian production which has fallen owing to deficient rains.“A major concern for the policy planners involved in ensuring the domestic availability of edible oils is the fact that domestic prices of oilseeds and vegetable oils are too un-remunerative to enthuse farmers for intensive oilseeds cultivation.
That, in a way, is also coming in the way of the Prime Minister Narendra Modi’s ambition of making India self-sufficient in the area of edible oils. After all, US$ 14 billion import bill on account of cooking oil is a huge drain on the country’s foreign exchange,” ASSOCHAM Secretary General Mr D S Rawat said. Edible oilseed production has been declining from 32.7 million in 2013-14 to 26 million tonnes in 2014-15, noted the study.It is believed that reduced dependence on edible oil imports could be brought about by increased domestic oilseed production, but barring much stronger price incentives, production and yield improvements depend on improved plant varieties and cultivation practices.
