Commodities

SEA terms high prices of edible oils blessing in disguise

Our Bureau Mangaluru | Updated on October 28, 2020 Published on October 28, 2020

Suggests govt not to reduce import duties

While highlighting certain facts about the rise in prices of edible oil in the country, the Solvent Extractors’ Association (SEA) of India has suggested the Government not to reduce import duties or encourage PSUs to import edible oils at concessional duties. The association said such a move would be counter productive and harm the long-term national interest.

In a memorandum to the Government, copies of which were released to media, Atul Chaturvedi, President of SEA, said that the association is given to understand that the Government is a trifle worried on account of rise in prices of edible oils in the country. SEA’s letter to highlight certain facts that may help in calibrating proper policy response, it said.

Indian perspective

Mentioning that edible oil prices have definitely moved up in the world in line with other commodities as a direct consequence of massive infusion of liquidity in the economies by various governments, the memorandum said this has been done to tide over Covid-related economic woes. This money finds its way into commodities helping them move up.

SEA termed this as a blessing in disguise in more ways than one from the Indian perspective. Highlighting them, the memorandum said the import duty collections have gone up significantly on account high prices.

“For far too long, we have kept edible oil prices very low in the country which has discouraged the oilseed farmer. No wonder our import dependence has gone up to about 70 per cent and oilseed cultivation has stagnated. This price rise will encourage the oilseed farmer to increase acreage and adopt better farm practices,” Chaturvedi said in the memorandum.

Going the Aatmanirbhar way

Referring to mustard sowing, it said the mustard farmer will respond positively this year and Agriculture Ministry’s target of 12.5 million tonnes of mustard production may be achieved.

If the country is able to achieve 12.5 million tonnes mustard production, it would give additional 1.5-2 million tonnes of domestically produced mustard oil. This will be a fantastic achievement and in line with the Prime Minister’s vision of ‘AatmaNirbharta’. This will bring down country’s import dependence. It is high time the pulses success is replicated in oilseed as well, it said.

At present, soyabean and groundnut prices are ruling 8-10 per cent above MSP which will go a long way in helping improve farmers’ income in line with the PM’s vision. Further, as in the past the Government will not be burdened with the prospect of defending MSP by buying these commodities and incurring huge expenditure, the memorandum said.

“We expect with kharif oilseed marketing in full flow and prospects of a large mustard crop, our domestic edible oil prices may also witness softening. Hence any change in policy to bring down prices by lowering import duty would send wrong signal to oilseed farmer and needs to be avoided at all costs,” he said in the memorandum.

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Published on October 28, 2020
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