Waive stock holding limits for smooth supply of cooking oil: SEA to govt

Edible oil industry body SEA on Thursday urged the government to exempt manufacturers as well as warehouses managed directly by them or through authorised agents from stock holding limits to ensure smooth supply of cooking oil during the lockdown.

In a letter to the union consumer affairs secretary, Solvent Extractors' Association of India (SEA) President Atul Chaturvedi said states should be advised to exempt edible oil manufacturers (oil millers and solvent extraction units) from stock limit on oilseeds, including their by-products.

That apart, he said manufacturers along with their depots/warehouses as well as their clearing and forwarding agents (CFAs) be exempted from stock limits under the Essential Commodities Act (ECA) and licensing requirement, if any.

"This will help the industry to procure oilseeds, rice bran and other oil bearing materials to maintain supply chain," he said. SEA said manufacturers are facing practical challenges due to imposition of stock limits.

"Edible oil manufacturers maintain elaborate and strong supply chains to cater to the consumer demand in various states. However, the current Covid-19 lock down has resulted in severe constraints on production, labour, supply chain, transportation etc," Chaturvedi said.

The plant of any manufacturer is generally located in few states and consumptions demands are met by maintaining multiple storage depots at different locations/states, he added.

The edible oil products are processed and manufactured at the plant and thereafter are transferred from the manufacturing plants to manufacturer managed depots -- that is clearing and forwarding hubs which are either operated directly by the manufacturer or through their duly appointed CFAs, the association explained.

"Operations of the CFA are managed by the manufacturer and the CFA depot or hub is not a Wholesale Dealer nor a Distributor but an extended arm of the manufacturer, and therefore, CFA for all practical purposes should be considered as manufacturer's depot only," it argued.

However, SEA said the local authorities at the state level fail to properly categorise CFAs and treat them at par with wholesale dealers or distributors.