India Defies Global Price Rise Trend

A Wheat Mandi - All Izz Well, says Govt

India Defies Global Price Rise Trend

Wheat, sugar, edible oil cost lesser than abroad

The Centre says timely intervention checkmates price rise

NEW DELHI, June 2 (The CONNECT) - The Centre’s timely intervention in regulating the mounting export of wheat and sugar through export regulations has insulated the prices of these commodities from increase in contrast to the prices prevailing in the global market.

The Government said its priority is to ensure sufficient availability of sugar at reasonable rates. The prices of sugar in the domestic market in the last twelve months are under control. The wholesale prices of sugar in India are in the range of Rs. 3150 to 3500 per quintal while the retail prices are in the range of Rs. 40-43 per Kg in the country. Due to lower production in Brazil, there may be shortage of sugar globally and therefore to safeguard the domestic availability and interest of Indian consumers, Government took timely measure to regulate sugar exports with effect from yesterdat till further orders, with a maximum export of 100 LMT during the year, an official statement said.

The price of EU Durram wheat in the international market is around Rs. 43/kg whereas Indian wheat is selling at an average price of Rs. 26/kg in wholesale.  There works out to 39.5% discount to the international market. All other countries except India are selling wheat at around 450 to 480 USD/ton. This has resulted in a rush of export contracts and as a consequence the domestic retail prices rose by 16.08 % year on year. In order to protect the consumers from the rising prices, wheat export has been regulated with effect from 13th May 2022. It has been done to manage the overall food security of the country and to support the needs of neighbouring and vulnerable countries, the government explained.

The price situation of the two commodities is being closely monitored on day-to-day basis so that appropriate timely measures may be taken to keep a check on their prices. The Inter-Ministerial Committee on Agri-Commodities chaired by Secretary (Food) closely monitors the prices and availability of agricultural commodities keeping in view the interest of the farmer, industry and consumers. The committee reviews price situation on weekly basis, consider relevant measures in relation to edible oils and other food items depending on the domestic production, demand, domestic and international prices and international trade volumes.

In its bid to control the continuous rise in the cooking oil prices since past one year, the Centre has cut the basic duty on crude palm oil, crude soyabean oil and crude sunflower oil from 2.5% to nil. The agri-cess on these oils has been brought to 5%. The basic duty on refined soyabean oil and refined sunflower oil has been slashed to 17.5% from the current 32.5% and the basic duty on refined palm oils has been reduced from 17.5% to 12.5%. The Government has extended the free import of refined palm oils for a period up to the year end.

To control prices of edible oils, futures trading in mustard oil on NCDEX has been suspended and stock limits have been imposed.

The Government has imposed stock limits on edible oils and oilseeds up to December 31 to ensure the smooth availability of edible oils and oil-seeds in the country. In order to ensure strict enforcement of the control order, Central teams from the Department of Food & Public Distribution are conducting surprise inspections of the stocks of edible oils and oilseeds held by retailers, wholesalers, big chain retailers and processors in major oilseed producing/consuming States to prevent hoarding and profiteering.

In its latest initiative to ease the prices of edible oils and provide relief to the consumers, the Government has issued notification for allocation of Tariff Rate Quota (TRQ) for import of 20 LMT of crude soyabean oil and 20 LMT of crude sunflower oil for the financial year 2022-23 and 2023-24 at zero import duty and zero AIDC (Agriculture Infrastructure and Development Cess). This has been done keeping in view the rising domestic prices of edible oils, average increase in domestic demand and uncertainty and decline in global palm oil availability.

In case of edible oils, the prices of soyabean oil (FOB Brazil) have increased by 35.50% whereas in the domestic market, the rise has been only 13% over the year. The international prices of sunflower oil (FOB Rotterdam) has increased by 35.86% while in the domestic market the commodity’s price has increased by 12.12% over the year.  RBD Palmolein internationally is hovering around 56.88% increase over the year whereas in India, the increase has been to the extent of 13.98% only.  The increase in domestic production of groundnut, mustard and soyabean crops during the crop year 2020-21 have contributed to lowering the prices of soyabean, sunflower and palm oil.

The steps taken by the Government has resulted in keeping the prices of edible oils under tight check.  The recent decision of the Government to reduce the excise duty levied on petrol and diesel has further helped in cooling down the prices of all commodities.

Throughout the world, food prices have increased sharply due to in crude oil prices, high transport costs due to container shortage and trade disruptions due to the current geo-political scenario. Indian consumers have got relief in their food basket due to these pre-emptive steps taken by the Government to control the sharp increase in the prices of essential items such as edible oils, wheat, rice, atta and sugar.

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