Govt may allow export of premium edible oil in bulk

Commerce department has moved Cabinet note for export of groundnut and rice bran oil

The government is planning to lift a ban on bulk export of groundnut and rice bran oils, in view of the sharp drop in the prices of high-value edible oils in the open market.

According to officials, the commerce department has moved a Cabinet note in this regard and the same is expected to be discussed soon. At present, export of all major edible oils is allowed in small packages of five kg each. Bulk export is banned.

"The domestic consumption of both rice bran and groundnut oil is around 10 per cent of the total value of edible oils produced in the country, while in volume terms it is even less at around five per cent. Therefore, even if exports are allowed at this juncture, it won't have any impact on prices," said a senior official.
 

OIL PLAN

• Groundnut and rice bran oils can be exported only in small packages of 5 kg each
• Open market prices of both the oils have dropped in the past few months
• Decision on raising import duty on edible oils is still pending
• The govt had first imposed a ban on bulk export of all edible oils in 2008 for a year, which was subsequently extended
• The last extension was granted in 2008

The food ministry, too, is believed to be in favour of allowing export of premium edible oils in bulk.

Data from Solvent Extractors' Association, a body of oilseed extractors, showed that in the open market, the price of refined groundnut oil dropped nearly nine per cent in the past month from Rs 88,500 a tonne in October to Rs 81,000 a tonne in November. Similarly, the retail price of refined rice bran oil fell five per cent during the same period from Rs 62,000 a tonne to Rs 59,000 a tonne. The edible oil extraction sector has also demanded lifting of the ban on bulk export of premium edible oils.

The government had first imposed a ban on bulk export of all edible oils in 2008 for one year, which was subsequently extended. The last extension was granted in 2008. However, in between, the government has allowed export of some edible oils in small packages of five kg each, up to a ceiling of 10,000 tonnes. This ceiling was also later relaxed.

However, on the import duty on edible oils, officials said a clear picture is yet to emerge as the

Cabinet Secretariat is keen to discuss the proposals put forward by both food and agriculture ministries simultaneously.

According to officials, the food ministry favours maintaining a duty differential between crude and refined edible oils at 10 percentage points, while the agriculture ministry wants it to be at 7.5 percentage points.

The current import duty on crude edible oils is 2.5 per cent, which is proposed to be increased to five per cent, while that on refined edible oils is 10 per cent. A three per cent education cess is levied on both.