Cooking Oil prices in the domestic market are affected by factors such as the international market, the exchange rate of the rupee, freight costs and available stocks
Cooking oils likely to get cheaper as India cuts import duty: Ahead of the festive season, the government has cut edible oil prices. The move is expected to reduce the cost of imported oil and reduce pressure on prices in the domestic market.
The government has significantly reduced the basic customs duty on certain varieties of sunflower, soybean and palm oil. The basic custom duty on crude sunflower oil has been reduced from 10% to zero under the new rules implemented by the Ministry of Finance. At the same time, the duty on refined sunflower oil has been reduced from 32.5% to 22.5%. This benefit may be reflected in the prices in the domestic market in the future. Custom duty on crude soybean oil and crude palm oil has also been reduced. Both of these will now cost 5% BCD instead of 10%. Similarly, the basic custom duty on refined soybeans and palm oil has been reduced from 32.5% to 27.5%.
The move by the government is expected to reduce the cost of imported oil and reduce pressure on prices in the domestic market. However, the direct impact will depend on several factors such as international prices, movement of the rupee and domestic supply.
India meets about 60% of its total edible oil requirement through imports. Therefore, the oil prices in the domestic market are affected by factors such as the international market, the exchange rate of the rupee, freight costs and available stocks. India mainly imports palm oil from Malaysia and Indonesia and soybean oil from Argentina and Brazil. In such a situation, the price changes in the global market reach the domestic consumers as well.
The decision of the government is expected to reduce the price of oil, but it does not mean that all the oil in the market will become cheap immediately.
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