The Indian government has decided to hold off on plans to reduce import duties on edible oils, in line with recent weakness in cooking oil prices.
India, the world’s largest edible oils importer, had been considering reducing in duties as prices for vegetable oils, particularly palm oil and soyabean oil, have skyrocketed over the past year. This surge has weighed significantly on customer purchases, adding to concerns of rising fuel prices and lower incomes due to the ongoing COVID-19 pandemic.
According to one government official, India doesn’t see cutting import duties as an ideal “sustainable solution” and are instead working on a more long-term solution, avoiding levy reductions if possible – although this solution has not yet been revealed. Another government official added that vegetable oil prices in the international market are easing due to a global resurgence in COVID-19 cases, which is also dragging domestic prices in India lower.
Bulk orders from the hospitality sector have fallen significantly over the past quarter as spiking coronavirus cases have led to new lockdown restrictions in India. Despite the recent fall in prices, Indian edible oil prices remain almost double their 2020 levels. These soaring prices have weighed on household consumption and are likely to continue doing so as long as prices remain elevated.
The edible oils price situation is currently being closely monitored by the Indian government in terms of available supply and global prices, with a possibility of these levy reductions being applied in the future, if warranted.