New Delhi, Oct 21 : There seems to be no respite for the common man reeling under high edible oil prices with research firm India Ratings and Research (Ind-Ra) predicting high prices for the key kitchen item despite import duty cuts.
The two back-to-back cuts in import duty on crude edible oil is unlikely to bring any relief to consumers as the reduction in import duty by India has been offset by a rise in global prices of crude edible oil.
The Malaysian palm oil market went up by about 150-170 ringgits (Rs 2,700-3,075) a tonne immediately after the duty cut announcement by the government of India, India Ratings noted.
In the wake of sky-rocketing edible oil prices, the government announced a reduction in the import duties on crude edible oil firstly in September 2021 and thereafter in October 2021.
As a result, India Ratings said, the basic customs duty on crude edible oil has been reduced to zero till March 2022.
“However, Ind-Ra believes it is unlikely to provide much comfort to consumers as the reduction in import duty by India has been offset by a rise in global prices of crude edible oil,” the research and rating firm’s Paras Jasrai has said.
Jasrai stated that a surge in global edible oil prices since 2QFY21 has put pressure on domestic prices, leading to higher retail inflation.
“Besides impacting domestic inflation, it has increased India’s edible oil import bill, thereby affecting the current account deficit. Vegetable oil is among the top 10 principal commodities in the country’s import basket since FY15,” he said.
As per Food and Agriculture Organisation (FAO) of the United Nations, world prices for vegetable oils have risen 59.3 per cent till July 2021 compared to pre-Covid-19 (February 2020) level.(UNI)