Department of Food & Public Distribution recommends removal of the restriction on import of RBD Palmolein and put it in the open general category of imports
The Centre has reduced the duty on Crude Palm Oil (CPO) by 5 per cent to bring relief to the consumers and reduce the edible oil prices. Further, to cool down the prices of RBD Palmolein (Refined Palm oil), the Department of Food & Public Distribution has recommended the removal of the restriction on import of RBD Palmolein and to put it in the open general category of imports. These moves are expected to lower the prices of edible oils for domestic consumers.
The major edible oils consumed in the country are mustard, soybean, groundnut, sunflower sesame oil, niger seed, safflower seed, castor and linseed (primary source) and coconut, palm oil, cottonseed, rice bran, solvent extracted oil, tree and forest origin oil. The total domestic demand for edible oils in the country is approximately 250 LMT per year. Around 60 per cent of the edible oils consumed in the country is met through imports. Palm oils (Crude + Refined) import constitutes around 60 per cent of the total edible oil imported, out of which 54 per cent is imported from Indonesia and Malaysia. As the country has to depend heavily on imports to meet the gap between demand and supply, International prices have an impact on domestic prices of edible oils.
Food inflation including high prices of edible oils has been a cause of concern and therefore the government has been monitoring their prices and taking steps by way of removing bottlenecks to soften prices. A mechanism was institutionalised involving nodal offices of the Customs department, FSSAI, plant quarantine division to monitor the speedy clearance of food commodities like pulses and Crude Palm Oil (CPO) at shipping ports. The international prices of crude edible oil and refined palm oil were showing a declining trend in prices over the past month. Still, the prices of domestic refined palm oil and crude edible oil remained high.
The government, keeping in view the consumer interest due to rising prices of edible oil, has reduced the duty on CPO duty by 5 per cent. Further, to cool down the prices of RBD Palmolein (refined palm oil), DFPD recommended the removal of the restriction on import of RBD Palmolein and put it in the open general category of imports to support its availability at lower prices for the domestic consumer.
Ministry of Finance vide Notification No. 34/2021-Customs dated June 29, 2021, has cut duty on CPO to 10 per cent from 15 per cent w.e.f. June 30, 2021, and this will remain in force up to and inclusive of September 2021. The reduction will bring down the effective tax rate on CPO to 30.25 per cent from the earlier 35.75 per cent inclusive of additional agri-cess of 17.5 per cent and 10 per cent social welfare cess. This reduction, in turn, will bring down the retail prices of edible oils.
Further, the Department of Commerce vide Notification No. 10/2015-2020 dated June 30, 2021, has issued a revised import policy for Refined Bleached Deodorized (RBD) Palm Oil and RBD Palmolein by removing both from restricted to free category. This would be effective with immediate effect and for a period up to 31.12.2021.
The government has reduced duty only till September 2021 to signal to farmers that their interests shall not be compromised. Making India ’AtmaNirbhar’ in edible oils is our cherished goal and the national oilseeds mission is committed to achieving it by aligning policies including foreign trade. The government will be monitoring the prices daily expects the industry to pass on full benefits to the consumers.
