The Hindu Business Line : ‘Govt must monitor veg oil prices’

While consumers are sure to benefit from the recent sharp lowering of customs duty on edible oils, the Central Government must stay vigilant on the price front to ensure that falling market prices do not hurt domestic oilseed growers’ interest, the Central Organisation for Oil industry and Trade warned.

According to the apex body, global oilseeds and vegetable oil production is widely anticipated to rebound in 2008-09 with output set to rise in many origins including the US. Overseas prices have begun to soften.

In order to ensure a fair deal for producers and consumers, the Government should fix a wholesale price band for edible oils, say Rs 55 a kg from crude oil and Rs 60 a kg for refined oils; the trade body has recommended adding these are realistic and reasonable prices for consumers while they enable growers to get remunerative returns, a win-win situation for all.

The Government should keep a close watch on market conditions – world production, demand and supply - and adjust customs duties in a way there commended price band is maintained, according to Mr Davish Jain, President.

Among other important recommendations made by the association to contain prices are creation of a buffer stock of 5-10 lakh tonnes of edible oils; supply of imported edible oil through the public distribution system at subsidised rates; exemption of edible oils from local taxes such as VAT and a time bound action to raise indigenous output through creation of oilseeds development fund.

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