Cabinet panel discusses edible oil, wheat prices

Concerned over rising edible oils prices and costly import of wheat, the Cabinet Committee on Prices (CCP) on Thursday discussed the edible oils and wheat position in the country.

"The price and supply situation of edible oil and wheat, besides trends in the international markets, was discussed by the CCP, but no decision was taken regarding cut in customs duty on edible oil or wheat imports," sources said.

The CCP had earlier asked the food ministry to bring out a "strategy paper" on import of edible oils. The committee had directed for studying and including in the strategy paper ways to create a buffer stock of imported edible oils.

The discussion on edible oil assumes importance as it was held in the backdrop of speculation over cut in customs duty due to steep rise in prices in the domestic market.

The country imports palm oil from Malaysia and Argentina and soya oil from Argentina and Brazil as the domestic demand is much higher than the production of edible oils.

The country's edible oil imports stood at 4.7 million tonnes in 2006-07 season ending October. During this season, imports reached 1.1 million tonnes till January.

Regarding wheat, the government yesterday said it had adequate buffer stock to meet the public distribution system requirements and may not require to import wheat till August.

Meanwhile, the edible oil industry is divided on the issue of further reducing the customs duty, with vanaspati industry demanding a flat rate of Rs 4,000 a tonne, while Central Organisation of Oil Industry and Trade wants retaining the duty at current level.