The government has called on edible oil companies to explain the recent spike in retail prices, despite assurances of adequate stock levels and lower import duties. The Centre had recently increased the basic customs duty on various edible oils to support domestic farmers, but the rise in retail prices has prompted concern, especially ahead of the upcoming festival season.
On September 14, 2024, the government raised customs duties on crude soyabean, palm, and sunflower oils from zero to 20% and on refined oils from 12.5% to 32.5%. However, during a meeting on September 17 with industry bodies, including the Solvent Extraction Association of India (SEA) and the Indian Vegetable Oil Producers’ Association (IVPA), the government urged companies to maintain stable prices, given that existing stocks were imported at lower duties.
“The industry has been asked to provide reasons for the price increase despite sufficient stock availability at lower import costs,” a senior official from the Ministry of Food said on Friday. The government emphasized that the imported stocks, which could sustain domestic consumption for 45–50 days, should prevent any immediate price hikes.
The government also highlighted the significant volume of edible oils—about 30 lakh tonnes—imported at previous lower duties. With the festival season approaching, increased consumer demand could further inflate prices if industry players fail to act responsibly.
India remains heavily reliant on imports for edible oils, meeting over 50% of its domestic needs through imports, primarily from Malaysia, Indonesia, Brazil, Argentina, and Russia. The recent increase in import duties is part of the government’s strategy to boost prices for domestic oilseed farmers ahead of the new soybean and groundnut harvests expected in October.
Officials continue to monitor the situation, reiterating that industry players must ensure price stability during this critical period.