The prices of edible oil may shoot up following the central government’s move to remove the limit on inventory for manufacturers, wholesalers and retailers, as well as raising import duties on edible oils. The twin moves brought cheer among the miller and trader communities, who expect demand take off mostly from institutional buyers and partly from households .”Till afternoon (before the announcement of removal of stock limit), I was begging to traders to buy groundnut oil but they were reluctant. After the stock limits were abolished, orders started pouring in. I wondered the way market sentiments changed,” said Samir Shah, president of Saurashtra Oil Mills Association (SOMA). Saurashtra is the main hub for production of groundnut, the main edible oil in the state.Central government on Thursday evening also raised import duties on crude palm oil, refined edible palmolein oil, crude and refined edible sunflower oil, crude and refined soyabean oil as well as crude and refined rapeseed oil from 25-54% to 35-54%. “This will give boost to domestic edible oil sector, which has been shirking because of cheaper imports,” said Shah.He agreed that the price of edible oils may rise for households but its share in annual spending of average households in negligible.”Edible oil is a necessary item. People spend a lot on unnecessary items,” said Shah. However, Sagar Rabari, general secretary of Gujarat Khedut Samaj, said the abolition of stock limit will allow players with deep pockets to buy groundnut at lower prices and sell oil when the prices rise at a later stage. “These players can create artificial shortage causing the prices to shoot up,” said Rabari.Shah claimed that farmers can benefit as they have about four lakh tonne of groundnut and 30 lakh tonne of soyabean. Rising prices will encourage farmers to grow groundnut in upcoming kharif season. Gujarat government has close to eight lakh tonne of groundnut, and is looking at ways tor dispose it. Removal of stock limit will result in higher buying by food processing units, hotel and restaurant operators and to a certain extent even households.SLIPPERY GROUNDSPlayers with deep pockets can buy at lower prices and sell oil when prices rise, say farmers. Households not be affected much as share of spend on edible oil is negligible in annual spending, say industry. Higher import duties will give a breather to local manufacturers, reduce dependence on imports.
Saurashtra Oil Mills Association
edible oil prices
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