The Hindu Business Line : ‘Govt should not allow edible oil prices to drop further’

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‘Govt should not allow edible oil prices to drop further’

Uncertainties could deplete stocks: Solvent extractors

Our Bureau

Chennai, April 11 With the prices of edible oils easing following a series of measures taken by the Union Government, the Solvent Extractors Association of India has urged the Centre to ensure that the market stabilises and prices are not allowed to drop further.

The Centre could also urge the State Governments to restrain from taking action against the industry and trade under the Essential Commodities Act, it said in a memorandum submitted to the Food and Civil Supplies Secretary, Mr T. Nandakumar.

“Duty cuts on edible oils in the last one month coupled with a fall in international prices have had a severe impact on domestic prices of edible oils and practically, most of the popular oils have declined by over Rs 10,000 a tonne in the wholesale market in one month,” it said in its memorandum.

Edible oil manufacturers had passed on the benefits of customs duty to the consumers and they themselves had cut the prices by Rs 5-7 a kg.

But despite the cut an uncertainty existed in the market, it said.

This was due to rumours of curbs on futures trading, implementation of storage control order and reluctance of importers to enter into new contracts.

This could deplete the stocks in the pipeline and in turn, lead to rise in prices from the next month, the solvent extractors body said.

“Raids and harassment by the officials of Civil Supplies of the Department of State Governments have further depressed the market.

“If prices were further reduced, we are afraid, it would discourage the farmers to undertake oilseed cultivation in the ensuing kharif season and would be counter-productive to our objective to increase the production of oilseeds to reduce our dependence,” it said.

The Government should ensure the market is stabilised at a level that would be comfortable to consumers as well as the farmers.