The government on Thursday extended stock restrictions on edible oils and oilseeds until December 31, 2022, in an effort to contain price increases.
According to a statement from the Ministry of Consumer Affairs, Food, and Public Distribution, "the decision was taken after talks at the highest level on the higher price trends of all edible oils owing to the present geopolitical conditions across the globe" (MCAFP).
According to the MCAFP statement, Ukraine's pressure on sunflower oil supplies has had a knock-on effect on Indonesia's export policy, affecting palm oil imports.
"It was aggravated by crop loss concerns in South America, which affected soybean oil supplies, resulting in a large upward trend in international soybean oil prices," the statement said.
"These measures are expected to limit any unfair market practices such as hoarding, black marketing, and so on," according to the statement.
"They will also aid in managing the prices of edible oils and ensuring that the maximum advantage of the tax decrease is passed on to the end consumers."
The government set stock holding limits on edible oils and oilseeds until March 31, 2022, in October 2021. The quantities of edible oils and oilseeds stock limitations, on the other hand, were left to the states and Union Territories to decide based on their respective consumption patterns.
Following that, only six states imposed stock ownership limits: Uttar Pradesh, Karnataka, Himachal Pradesh, Telangana, Rajasthan, and Bihar.
The Centre issued the limitations for the amounts of stocks held by traders, wholesalers, and retailers in those states except those that had already imposed stock holding limits to bring down edible oil prices in a second notification in February 2022.
Retailers can only retain 30 quintals of edible oils and 100 quintals of oilseeds, while wholesalers can hold 500 quintals of edible oils and 2,000 quintals of oilseeds at any given moment, according to new stock holding regulations.
Processors of edible oils would be able to stock 90 days of storage capacity, whilst processors of oilseeds would be able to stock 90 days of edible oil production capacity as needed on a daily basis.
India is reliant on imported edible oils, with imports accounting for roughly 14 million tons (MT), or two-thirds of the entire anticipated annual consumption of 22 MT.
India imported 13.35 million tons of edible oil in 2020-21, with palm oil accounting for over half of that.
