Ban on bulk edible oil exports extended for one more year

Despite record output, restriction to go on till Sept 30, 2012, to avoid further rise in food inflation.

The Directorate General of Foreign Trade (DGFT) under the commerce ministry has extended the ban on edible oil exports for another year, to avoid a further spurt in food inflation.

A notification on the DGFT website said the ban was being extended till September 30, 2012. Exporters will continue to enjoy a relaxation of 10,000 tonnes as granted earlier on small consumer packs of 1-5 kg.

Export was initially prohibited for a year with effect from March 17, 2008, and extended from time to time. The ban was to expire tomorrow.

“We had urged the government to lift the ban, for the betterment of farmers. Since no ceiling has been kept on imports, ideally, there should have no ceiling on exports as well,” said B V Mehta, executive director of the Solvent Extractors’ Association of India, a trade body representing 850 edible oil producers, packers and retailers.

Certain exemptions have been granted on castor oil and coconut oil export from Cochin port and export produced out of minor forest produce. Even if the government had granted permission for exports, the overall shipment was not likely to surpass 40,000 tonnes for the entire year. Only a certain segment of customers abroad are interested, in groundnut, mustard and copra oil. India produced a record 31.1 million tonnes of oilseeds in the 2010-11 crop year, ending June.

According to the fourth advance estimates prepared by the Union agriculture ministry, the country is estimated to have harvested a record 12.7 mt of soybeans, 7.5 mt of groundnut and 7.7 mt of rapeseed and mustard. Hence, there was no need for export restrictions, said an exporter.

Trade sources said the leap was bound to reduce import of vegetable oil by about a million tonnes. Total vegetable oil availability from domestic sources is estimated now at 7.2-7.5 mt as compared to a sustained production of 6.5-6.8 mt over the past several years.