Stock limits on edible oils extended to cool prices

In a bid to further cool down edible oil prices and curb hoarding, the Centre on Friday extended stock limits on edible oils and oilseeds till June 30.

Besides, the government has specified the stock limits that have to be imposed by states that have not implemented the earlier order on the limits.

In October 2021, the ministry of consumer affairs had imposed stock limits till March 2022 and left the decision to states to decide on the stock limits based on available stock and consumption pattern.

In pursuance with the Centre's October 2021 order, six states -- Uttar Pradesh, Karnataka, Himachal Pradesh, Telangana, Rajasthan and Bihar -- had imposed the stock limits in their respective states.

Many states had not imposed the stock limits.

The ministry felt that implementation of stock limits across all states was necessary to transfer the full benefit of price control to the end-consumer, an official statement said.

"In an effort to further cool down the prices of edible oils, the government has taken various steps, latest being an order notified on February 3, 2022 specifying the stock limit quantities on edible oils and oilseeds up to June, 30," it said.

For edible oils, the stock limit would be 30 quintals for retailers, 500 quintals for wholesalers, 30 quintals for retail outlets of bulk consumers i.e. big chain retailers and shops and 1,000 quintals for its depots.

Processors of edible oils would be able to stock 90 days of their storage capacities.

For edible oilseeds, the stock limit would be 100 quintals for retailers and 2,000 quintals for wholesalers.

Processors of edible oilseeds would be able to stock 90 days production of edible oils as per daily input production capacity, the statement said.

Exporters and importers have been kept outside the purview of this order with some caveats, it added.

In case the stocks held by respective legal entities are higher than the prescribed limits, the ministry said then it has to be declared on the portal of Department of Food and Public Distribution.

The stocks have to be brought back to the prescribed stock limits in this control order within 30 days of the issue of this notification, it added.

The respective legal entities of the six states which have been exempted in this order are to follow the stock limits prescribed by the state administrations and declare the same on the portal.

According to the ministry, this move is expected to curtail any unfair practices like hoarding and black marketing in the market which may lead to any increase in the prices of edible oils.

This would also contribute to further reduction in prices by ensuring that maximum benefit of the duty reduction is passed on to the end-consumers, it added.

Central Organisation for Oil Industry and Trade (COOIT) chairman Suresh Nagpal said, "we need to wait and watch to see the impact of the move. That should be visible over the next 1-2 months."

India meets more than 60 per cent of its domestic demand for edible oils through imports. Retail prices of edible oils have shot up due to rise in the global market.

Photograph: Rupak De Chowdhuri/Reuters