Business News: The rising prices of edible oils are a major concern for the common man in the country's economy. Being an essential part of the household kitchen, even a slight increase in the prices of these oils has a huge impact on the pockets of millions of families. In the midst of this crisis, the government has taken a big step and decided to cut the customs duty on crude edible oils by 10 percent, which is expected to bring down the prices of oil in the upcoming days and provide financial relief to the general public.
Government strategy on import dependence
India depends on imports for about 70 percent of its vegetable oil demand. The country mainly buys palm oil from Indonesia, Malaysia, and Thailand, while it imports soybean and sunflower oil from Argentina, Brazil, Russia, and Ukraine. In the last few years, domestic prices have been rising steadily due to price fluctuations in the global market and increasing demand. To control this, the government has chosen the path of reducing prices in the domestic market by cutting customs duty on crude edible oils.
Cut in custom duty: How much difference?
The government has reduced the basic customs duty on crude palm oil, crude soy oil, and crude sunflower oil from 20 percent earlier to 10 percent now. This means that the total import duty has come down from 27.5 percent to 16.5 percent. The effect of this huge reduction will be seen on the prices of oil, due to which producers will get cheaper raw material, and they will be able to make oil available in the market at cheaper prices.
Record of prices in the last one month
Government data shows that the prices of groundnut oil and palm oil have fallen in the last month. The price of groundnut oil has come down from Rs 190.44 per kg to Rs 188.47, while palm oil has become cheaper by about Rs 3 to Rs 134.09. At the same time, a slight increase has been registered in the prices of mustard oil, vegetable oil, and soy oil. The price of sunflower oil remains stable.
Will the common man get real relief?
This policy of the government is expected to reduce the prices of edible oils, but its real benefit will be when this effect reaches the consumers. The distribution and production structure of edible oil in India is quite complex, so constant monitoring is necessary to increase competition in the market and control prices. If this reduction in import duty can also support domestic oil production companies, then this step will be considered successful.
Way forward and need for domestic production
The demand for vegetable oils in the country is continuously increasing. Therefore, it is also necessary to reduce dependence on imports and promote domestic production. The government should provide better seeds, technology, and financial assistance to farmers so that India's vegetable oil production capacity is strengthened and dependence on imports is reduced. Also, steps like tax and duty should be reviewed from time to time to ensure fair prices in the market.
This duty reduction by the government is expected to lead to affordable availability of edible oils in the domestic market in the coming times, which will bring relief to crores of consumers in the country. Now it remains to be seen how this policy is implemented effectively and when its real effect on oil prices will be seen.
