Edible oils costly, but no benefit for farmers.

Consumers will have to pay 5-6 per cent more for edible oils following the increase in import duty with effect from Friday last week. However, domestic farmers may still not get even the minimum support price (MSP) for oilseeds because farm-gate prices are ruling 15-25 per cent lower than the MSP. 

The Centre has increased the import duty on almost all edible oils with effect from November 2017. The import duty on crude soyabean oil has been increased to 30 per cent (from 17.5 per cent), soya bean refined oil 30 per cent (20 per cent), palm crude oil 30 per cent (15 per cent), RBD palm oil 40 per cent (25 per cent), sunflower crude oil 25 per cent (12.5 per cent), sunflower refined oil 35 per cent (20 per cent), canola/rapeseed/mustard oil crude 25 per cent (12.5 per cent) and canola/rapeseed/ mustard oil refined 35 per cent (20 per cent). 

Davish Jain, chairman of the Soyabean Processors Association of India said: "As prices of all oilseeds fell below MSP and a sense of deep distress and despondency was setting in the minds of farmers, the government, at the highest level, finally saw the logic in our requests and the result is the increase in duty announced." Edible oils costly, but no benefit for farmers

The government has increased import duty to support farmers. However, the increase in oilseed prices is expected to be marginal as prices of soyabean, groundnut, etc are ruling 15-25 per cent below MSP. 

In the early 1990s India used to meet more than 90 per cent of its edible oil requirement through domestic production. With progressively declining import duty, India’s self-sufficiency declined to 30 per cent, hitting oilseed farmers and crushers. 

According to government data, India was the largest importer of soyabean oil in 2015-16, accounting for 30 per cent of the global shipments. Industry executives said the prevailing oilseed prices, coupled with indirect incentives given by the Madhya Pradesh government to traders by agreeing to pay the gap between market price and MSP, are unlikely to take the seed prices to MSP levels in the near future.

Even after the hike in import duty, there was no change in groundnut prices on Saturday in Gujarat. "Groundnut is a premium oil consumed by a few people. India is expected to reap a bumper crop of groundnut this year," said Govindbhai Patel, managing partner, GG Patel and Nikhil Research Company. Some industry executives, however, said farmers will get better returns.