Gujarat to import 20K tn of edible oil

Cashing in on the Centre's move to scrap import duty on all edible oils in crude form, the Gujarat government is now gearing up to create a buffer stock of edible oils for the state. The Gujarat State Civil Supply Corporation has swung into action and plans to import 20,000 tonnes of edible oil.

According to industry estimates, Gujarat consumes around 500,000 tonnes of edible oils annually, of which cottonseed, groundnut and other oils constitute 60 per cent, 20 per cent and 20 per cent respectively. Except groundnut oil, the state has to heavily depend on imports for meeting the requirement of other oils such as soyabean, palm, mustered and cottonseed.

Two years ago the Centre had withdrawn powers relating to stock control of essential commodities from states, which resulted into absence of any direct control over interstate supplies and exports of edible oils. Taking undue advantage of lower production of groundnut last year, which was also the election year in Gujarat, some oil millers in the state formed a cartel and fuelled the prices of groundnut.

Following this, the state civil supplies department ordered the oil millers to announce their stock holdings. However, the state government's move to curb the price of groundnut oil, which was hovering around Rs 1,500 per 15 kg, failed.

Gujarat is known for its high-quality HPS groundnuts and nearly 500,000 tonnes of HPS groundnuts move out of the state in the form of exports and inter-state supplies. Similar trend was witnessed in the case of foodgrains and pulses.

Following futures trading in these commodities and stock holding by large companies, foodgrains and pulses prices also firmed up. Taking all these factors into account, the state requested the Centre to scrap the import duty on edible oil to zero and demanded a ban on futures trading in edible oils and pulses.

The state government had also requested the Centre to allot specific stock to states from the Centre's pool of imported edible oils so that the prices could be contained. After repeated representations for two-and-a-half months, the Centre finally announced a slew of measures.

"Scrapping of import duty on edible oils by the UPA government is a kind of acknowledgment to our demand," Gujarat State Civil Supplies Corporation's additional chief secretary, SK Nanda said, adding, "Gujarat has also demanded that it should be allotted 18,000-19,000 tonnes stock from the imports of edible oils that the Centre is planning to take up." The allotted stock would be supplied in the open market at prices lower than the existing levels. This will put pressure on spiralling prices of edible oils," said Nanda.

Sources in the department also said the state government had urged the Centre to restore the powers of stock control to states. The Centre had recently hinted that the powers would be given back to the state.