Edible Oil Levy Not To Hit Market Now

An increase in Indias import duties on edible oil will not immediately hit the domestic market but prices will surge with the onset of the lean season in July, industry officials said yesterday.

Agriculture minister Chaturanan Mishra said on Wednesday he had written to finance minister P Chidambaram proposing that the import duty on edible oils be increased to 30 per cent from 20 per cent.

Mishra told reporters after a meeting with state agriculture ministers in New Delhi that he had received complaints from industry officials that edible oil imports were cheaper than domestic production.

Even if the duties are increased it will not immediately affect the market because the summer crop has started moving, Navinbhai Shah, president of Bombay Oilseeds and Oil Exchange Ltd, told Reuters.

 

But prices will shoot up once the lean season starts in July, Shah said. The months of July to October are considered lean months because domestic supplies dry up as demand surges due to the festival season.

India harvests two oilseed crops annually, with the bulk of its output from the winter crop. The winter crop is sown in July and harvest starts from October. The summer crop harvest starts from March.