Review of the impact of duty cut on retail prices of edible oil

19-Jun-2025 05:07 PM

New Delhi. A press release issued by the Union Ministry of Food, Consumer Affairs and Public Distribution stated that, following the significant cut in customs duty, officials from the Department of Food and Public Distribution conducted inspections of major edible oil refining and processing units across the country.

The objective was to assess the impact of the reduced basic import duty on crude edible oils—from 20 percent to 10 percent—on the maximum retail price (MRP) and price to distributors (PTD) of refined soybean oil, sunflower oil, and palmolein.

The inspections were carried out in states with the highest concentration of edible oil refining units, including Maharashtra, Andhra Pradesh, Madhya Pradesh, and Gujarat.

These states host the majority of the country's edible oil processing infrastructure. The release noted that most units have already reduced their MRP and PTD, leading to a softening of refined edible oil prices in the market.

The reduction in import duty, effective from May 30, 2025, lowered the cost of crude edible oil imports and allowed processors to offer refined oils at more competitive prices.

After witnessing lower-than-average imports until April, the arrival of palm oil shipments began to rise in May, with a significant increase anticipated in June.

Imported oil tankers have started queuing at Kandla Port, where clearance is reportedly taking up to 8–10 days due to high volumes.

However, there are also reports of Indian importers cancelling some July–August shipment contracts due to rising prices in exporting countries.

Despite this, the government expects the edible oil market to stabilise in the coming days. Companies that have not yet reduced their prices are expected to do so soon, and the benefits of the customs duty cut are likely to reach consumers gradually.