Oilseed prices have risen in the last two days following the government’s decision to bail out domestic edible oil producers through a sharp rise in import duties.
The government had on November 18 almost doubled the import duty on all variants of edible oils.
Soybean prices have shot up by 7% to Rs 3,052 a quintal over the last two weeks in the Indore mandi. Trailing by Rs 200-250 a quintal for several weeks, Soybean in the Indore mandi has exceeded its minimum support price.
Prices of Castorseed in the Disa mandi also rose by 2.7% to trade currently at Rs 4,548 a quintal. Rapeseed oil and Groundnut oil prices are up by 6.41% and 2.27%, respectively, to trade at Rs 83,000 a tonne and Rs 90,000 a tonne in the week ended December 1.
The measures have turned around the fortunes of edible oil producers with many of them planning to increase their operating capacities, which had declined to their lowest level of 30-35 per cent in November.
The revised Foreign Trade Policy also raised benefits in the Merchandise Exports from India Scheme for Soybean Meal to seven per cent from the existing 5%.
The Solvent Extractors’ Association of India reckons the country’s 350 solvent extraction plants have an annual oilseed processing capacity of 30 million tonnes. India imports 15 million tonnes of vegetable oils (crude and refined) to meet a demand of 24 million tonnes. After reaching 2.47 million tonnes (worth Rs 4,298.5 crore) in 2014-15, India’s oilmeal exports plunged to 1.86 million tonnes (worth Rs 3,178.7 crore) in 2016-17.