India, the top global vegetable oil importer, confirmed on Monday that it will extend edible oil imports at reduced rates

India, the world's largest importer of vegetable oil, announced late on Monday that it would continue edible oil imports at a reduced rate for an additional year, until March 2025. The decision is intended to keep local prices in check.

March 2024 was the deadline for reducing the import duty structure on crude palm oil, crude sunflower oil, and crude soy oil.

"The government is eager to keep prices in check ahead of elections, so this decision was expected," stated Sandeep Bajoria, CEO of vegetable oil brokerage Sunvin Group.

December had the sharpest rate of annual retail inflation growth in India in four months, primarily due to increases in the cost of some food goods.

The government outlawed the export of wheat in 2022 and the export of non-basmati white rice to foreign countries last year to drive down costs. This year, mills in New Delhi have also stopped exporting sugar.

India will continue export restrictions on sugar, wheat, and rice

For the time being, India will maintain its export restrictions on sugar, wheat, and rice, Trade Minister Piyush Goyal announced on Saturday.

This notification retains the present duty structure. According to Bajoria, this means that neither local prices nor import trends will be affected.

India mostly purchases palm oil from Indonesia, Malaysia, and Thailand; on the other hand, it imports sunflower oil and soy oil from Argentina, Brazil, Russia, and Ukraine.

Due to competitive rates, refined palm olein purchases soared in December, resulting in the highest level of palm oil imports from India in four months.

India, which imports more than two-thirds of its edible oil needs, has been finding it difficult to grow its oilseed crop as farmers are finding other crops to be more profitable.

Also read: Consumer inflation reached a four-month high of 5.69%, within the tolerance range of RBI

B.V. Mehta, executive director of the Solvent Extractors' Association of India, claims that despite the government's objective of preserving pricing stability, the long-term approach has detrimental effects on regional oilseed growers. Mehta stated that cheaper imports put pressure on oil prices, essentially discouraging them from planting more.