Center removes stockholding limit on edible oils and oilseeds

According to a statement issued by the Ministry of Food and Consumer Affairs, this order will come into force with immediate effect.

The development will allow wholesalers and large chain retailers to hold different varieties and brands of edible oils, which they are currently unable to keep due to stock control orders, the statement said.

It further said that the exemption will have a positive impact on the prices of oilseeds as it will encourage procurement of oilseeds, thereby increasing the returns of farmers growing domestic oilseeds.

India is the largest importer of edible oils like palm oil, soya oil and sunflower oil in the world.

Why the decision to impose stock limits

To check the rates of edible oils and oilseeds, India on October 8 last year had first imposed stock limits on retailers, wholesalers and bulk consumers, under which the stock limit quantities were to be decided by the states.

Subsequently, the government fixed a uniform stock limit, extending the order till June 30, 2022. This order was again extended till December 31 this year.

The Ministry has reviewed the stock limits keeping in view the price situation of major edible oils, which are now gradually reversing, and the prices of edible oils in the international and domestic markets have declined significantly.

“The need was felt to exempt large chain retailers and wholesalers from the stock control order as there were reports that wholesalers and large chain retailers were facing problems in their sales due to the control order. The limit specified for them was very less and replacement of shelf stock in city limits on daily basis is not possible,” it said.

The ministry said the stock limit for wholesalers and large chain retailers was based on the limit specified in the stock limit imposed in 2008 and it was a conscious decision to keep the quantity low. Furthermore, at the time, large chain retailers did not exist or play a bigger role than they are today.

The stock limit order was imposed in the country due to rising prices of edible oils in both the international and domestic markets. High volatility in prices was causing hoarding, profiteering and black marketing at that time.

This timely intervention of the government has brought down the skyrocketing prices and helped to check hoarding, especially of soybean seeds, it said.

There is a reduction of 55-60% in the total consumption of edible oils in the country. About 13.35 million tonnes of edible oil was imported in FY 2011.

with agency input