"Edible
oil duty cuts in the last one month coupled with a fall in
international prices has had a severe impact on domestic
prices of edible oils and practically most of the popular oils
have reduced over Rs 10,000 per tonne in the wholesale
market," Solvent Extractors' Association of India's
President Ashok Sethia said in a statement here.
Following
high inflation rate of over 7 per cent the government has
taken many steps including a cut import duty of edible oil to
contain price rise.
Sethia
said edible oil manufacturers have passed on the benefits of
custom duty reduction to consumers and the sale price has been
reduced by the manufacturers by about Rs 5-7 per kilogram in
the last one month.
Although
prices have softened in the last one month owing to scrapping
of duty on crude edible oil, the prices could go up again in
tandem with the international market, he said.
"We
have suggested to state governments to consider doing away or
keeping in abeyance for some time VAT (4 per cent), octroi and
APMC Tax on edible oils which accounts for nearly 8 per cent
(equal to Rs 4-5 per kg). If this is done, industry will be
too pleased to pass on this benefit also to consumers,"
Sethia said.
The
Indian Meteorological Department's (IMD) prediction of monsoon
rainfall this year at 99 per cent of the long-period average,
bodes well for crop output in the ensuing kharif season, he
said.
Good
rainfall this year would go a long way in easing pressure on
the supplies of several agricultural commodities including
oilseeds and oils whose prices have been on the boil in recent
months, Sethia said.
However,
uncertainty about restrictions on futures trading and likely
implementation of storage control order by state governments
and raids by civil supply officials in some states had pushed
the market into a total doldrum stage and importers were
reluctant to enter into new contracts for imports, he said.
Local
trade and importers are worried about harassment and have been
forced to reduce their business activities. This may deplete
the stock in the pipeline and may put upward pressure on
prices.
The
Association had brought this situation to the notice of the
Central government and following this, the Ministry of
Consumer Affairs, Food & Public Distribution, immediately
issued an order on April 7, confirming that the stock limit
shall not be applicable to imported edible oils.
Sethia
urged state governments to restrain civil supply officials
from taking indiscriminate action against the industry and
traders who play a vital part in the chain of supply. This may
otherwise lead to disruption in the supply line and could lead
to unnecessary shortages, he added.
So
