Edible oil prices soften after customs duty cut

19-Jun-2025 11:45 AM

New Delhi. It has been officially claimed that after a significant reduction in the basic import duty on crude edible oils, most companies involved in the manufacture and trade of edible oils have begun lowering the maximum retail price (MRP) and price to distributors (PTD) of their products. This move is expected to provide relief to common consumers.

The government issued a notification on May 30, 2025, reducing the basic import duty on crude palm oil, soybean oil, and sunflower oil from 20 percent to 10 percent, bringing the total effective customs duty down from 27.5 percent to 16.05 percent. However, there was no change in the import duty on refined edible oils, which remains at 35.75 percent.

According to official sources, several companies have already reduced prices, while many others have assured the government that they will do so in the coming days. With the reduced import costs, companies now have an opportunity to procure crude edible oils at lower prices and are expected to pass on the benefit to consumers.

The inflation rate in edible oils and fats, which contribute 3.56 percent to the Consumer Price Index (CPI), surged to 17.91 percent in May 2025, compared to a negative rate of 6.71 percent in May 2024.

During this period, retail inflation was reported at 19.61 percent in mustard oil, 24.27 percent in refined soybean and sunflower oil, 78.04 percent in coconut oil, and 21.32 percent in vegetable oil. In contrast, the price of groundnut oil declined by 1.77 percent.

On June 11, the Union Food Secretary held an important meeting with representatives of major associations, organizations, and manufacturers in the edible oil industry. The Secretary urged companies to immediately pass on the benefit of the reduced duties to consumers.