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Marketmen's apathy pushes government into importing edible oil

The government is importing 150,000 tonnes of edible oil from east Asian countries to bridge the gap between demand and supply. The first shipment is likely to reach India by the first week of August, Finance Minister Yashwant Sinha announced in the Rajya Sabha.

The finance minister said the country had to import about 1.4 metric tonnes of palmolein from southeast Asian countries every year under open general licence to meet the demand.

But due to the economic crisis in the Southeast Asian countries and the currency problem in East Asian countries, the price of edible oil was higher by $ 200 per metric tonne in the international market.

This remained the major deterrent against importing the oil, leading to shortages in the market, he said.

To encourage imports under oil, the government reduced the customs duty from 25 per cent to 10 per cent but importers did not show much interest as the prices were still up by $ 100 per metric tonne. The government therefore decided to import the commodity on its own from East Asian countries.

Regarding shortage of vegetables and fruits and resultant rise in prices, Sinha said both commodities were perishable and it was difficult for the government to ensure their supply.

Both fruits and vegetables were seasonal items and the moment the government realised that the production was low this year, it took some steps, like making available onions and potatoes through National Marketing Federation which has opened 100 outlets in Delhi.

Besides, the civil supplies minister had written to all chief ministers to crackdown on hoarders and blackmarketers in their respective states.

He admitted that the prices of rapeseed and mustard oil had gone up by 35 per cent and arhar and masoor by 26.7 per cent and 15.5 per cent respectively in the past three months. But on the other hand the prices of cocunut oil and gram had come down by five per cent and 14 per cent respectively.

In the Lok Sabha, Food Minister Surjeet Singh Barnala said the high prices of edible oils in the domestic market were already showing a downward trend and would further decline with the import contracting of 150,000 tonnes of palmolein oil by the State Trading Corporations.

He said that edible oil prices had come down by Rs 200 per quintal in the last one week. However, many of the Lok Sabha members did not agree with the minister's observation.

The food minister told V V Raghavan that the government would inquire into the member's allegation of OGL imports of coconut oil by private traders. Import of coconut oil under OGL is not allowed under the existing policy, he added.

Barnala said the domestic requirement of edible oils for the current year was estimated at 8.2 million tonnes. He did not specify the demand-supply gap and import needs.

UNI