After realizing that only six States had implemented quantitative limitations after its advisory given four months ago, the Centre has decided to extend the stock limit on edible oils and oilseeds, which will be in effect until June 30. The new notification, which specifies the quantitative limits across the nation, was published on February 3, allowing these six States to continue with their respective directives.
On October 8, 2021, the government announced stock limitations on edible oils and oilseeds, which were in effect until March 31, 2022, and empowered states to implement them.
According to the Food Ministry, only Uttar Pradesh, Karnataka, Himachal Pradesh, Telangana, Rajasthan, and Bihar had implemented the stock restriction after reviewing the directive. The Union government has specified the quantities of stock limits of edible oils and oilseeds for all States except the six, the ministry added, because the implementation of stock limits across all States and Union Territories is required to transfer the full benefit of price control to end consumers.
Be Aware Of Your Limitations
The stock limit for edible oils would be three tonnes per outlet for retailers (including supermarket chains), 50 tonnes for wholesalers, and 100 tonnes at the depot level for supermarket chains. Processors are only permitted to keep edible oils for a maximum of 90 days in their "storage" capacity.
Only edible grade oilseeds will be subject to the stock restriction, which will be 10 tonnes for retailers and 200 tonnes for wholesalers. Processors will have 90 days of "production capacity" depending on their daily processing.
With certain exceptions, exporters and importers have been kept out of the stock restriction order, according to the ministry. If an exporter can show that all or part of his stock of edible oils and edible oilseeds is intended for export, only the stock intended for export will be exempted. If an importer can show that the stock in question is obtained from imports, they will be exempt from the stock restriction.
Putting An End To Unfair Practices
Retailers, distributors, and processors have also been requested to comply with the quantitative restrictions by March 4th (within 30 days). They have been requested to report their stock holdings on the designated site if their holdings exceed the stipulated limits.
"The action is anticipated to curb any unfair activities such as hoarding and black marketing that might contribute to a rise in edible oil prices," the government stated. The new notification comes despite the fact that many cooking oil prices have fallen slightly in the previous month due to expectations of a strong mustard harvest.
The all India average retail price of groundnut oil was ₹180.72/litre and that of mustard oil ₹188.75/litre, vanaspati ₹140.34/kg, soyabean oil ₹148.28/litre, sunflower oil ₹161.72/litre and palm oil ₹129.72/litre on February 3. However, on January 3, the price was ₹180.84/litre in case of groundnut oil, ₹185.91/litre for mustard oil, ₹137.77/kg for vanaspati, ₹147.69/litre for soyabean oil, ₹161.59/litre for sunflower oil and ₹128.54/litre in case of palm oil.
Industry Point of View
Many officials in the edible oil business have expressed concern about the timing of the decision, fearing that merchants may avoid the market because they will have difficulty selling their products. However, another section stated that farmers might maintain their stock in anticipation of more price increases, such as those observed in soyabean and cotton this year.
The government should also guarantee that farmgate prices of mustard are not lowered when the harvest arrives next month, according to Suresh Nagpal, head of the Central Organization for Oil Industry and Trade.
