The Centre has decided to extend the stock limit on edible oils and oilseeds, which will be in force until June 30, after realising that only six States had imposed the quantitative restrictions following its advisory issued four months ago. However, the fresh notification issued on February 3, specifying the quantitative limits across the country, has allowed these six States to continue with their respective orders.

The government had notified the stock limits on edible oils and oilseeds on October 8, 2021, which was valid until March 31, 2022, empowering States to impose the limits.

On review of this order, it was observed that only Uttar Pradesh, Karnataka, Himachal Pradesh, Telangana, Rajasthan and Bihar had imposed the stock limit, the Food Ministry said on Friday. Since the implementation of stock limits across all States and Union Territories is necessary to transfer the full benefit of price control to end consumers, the Union government has specified the quantities of stock limits of edible oils and oilseeds for all States except the six, the ministry added.

Know the limits

For edible oils, the stock limit would be three tonnes for retailers (including supermarket chains) at each outlet, 50 tonnes for wholesalers and 100 tonnes for supermarket chains at depot level. Processors are allowed to stock maximum 90 days of their “storage” capacity of edible oils.

In oilseeds, the stock limit will be applied only to edible grade and will be 10 tonnes for retailers and 200 tonnes for wholesalers. It will be 90 days of “production capacity” for processors based on their daily processing.

Exporters and importers have been kept outside the purview of the stock limit order with some caveats, the ministry said. An exporter, if able to demonstrate that the whole or part of his stock in respect of edible oils and edible oilseeds are meant for exports, only the stock meant for export will be exempted. An importer, if able to demonstrate that the stock in question is sourced from imports, will be outside the purview of the stock limit.

Curtailing unfair practices

The Centre has also asked the retailers, wholesalers and processors to conform to the quantitative limits by March 4 (within 30 days). In case the stocks held by them are higher than the prescribed limits, they have been asked to declare the details on the prescribed portal.

“The measure is expected to curtail any unfair practices like hoarding and black marketing which may lead to any increase in the prices of edible oils,” the government said. The fresh notification has come even though prices have marginally declined in the last one month in many cooking oils amid expectation of a bumper production of mustard crop.

The all India average retail price of groundnut oil was ₹180.72/litre and that of mustard oil ₹188.75/litre, vanaspati ₹140.34/kg, soyabean oil ₹148.28/litre, sunflower oil ₹161.72/litre and palm oil ₹129.72/litre on February 3. However, on January 3, the price was ₹180.84/litre in case of groundnut oil, ₹185.91/litre for mustard oil, ₹137.77/kg for vanaspati, ₹147.69/litre for soyabean oil, ₹161.59/litre for sunflower oil and ₹128.54/litre in case of palm oil.

Industry view

Many edible oil industry officials have raised concern over the timing of the decision as they fear traders will stay away from the market since they will have difficulties in selling their commodities. But, another section said farmers themselves could keep the stock expecting further increase in prices which are seen in soyabean and cotton, this year.

Suresh Nagpal, chairman of Central Organisation for Oil Industry and Trade, said the government should also ensure that the farmgate prices of mustard are not depressed when the crop starts arriving from next month.

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