Despite the increase in the arrival of soybean in the mandis, the prices of edible oil are not decreasing. Everyone is surprised by the lack of reduction in oil prices even after Diwali. According to traders, oilseeds are the biggest reason for oil prices not falling. Oil mills are also running in loss.
The arrival of soybean is increasing in the markets of Madhya Pradesh, but edible oil is not becoming cheaper. Oil is expensive for consumers while the surprising thing is that farmers are not getting the right price for soybean. Oil mills are also running in loss.
The relief in oil prices, the fair price of farmers’ produce and the hopes of profit for the oil industry have been ruined by the cheap cake cake. The government’s efforts also failed. Farmers, consumers and industries all seem to be troubled by this. It is surprising that oil is not cheap even after Diwali.
Soybean oil rates remain at Rs 100
Till September 12, the price of soybean oil in the wholesale market of Indore was around Rs 100 and the price of groundnut oil was around Rs 110. After this the government increased the duty on oil import by 20 percent. It was argued that farmers would be able to get the right price for soybean. The effect of this was that the price of oil increased to Rs 150 per liter.
Soybean prices did not increase for farmers
The strange thing is that soybean prices could not increase for the farmers. Now the arrival of soybean is increasing in the markets across the state and Diwali has also passed but the prices of oil have not decreased. Consumers are still getting oil at Rs 140 per litre. Industry people and businessmen are saying that soymeal i.e. cake has created a hindrance in the way of oil becoming cheaper.
loss due to stoppage of exports
The solid part left after extracting oil from soybean is called cake or soybean meal. Being rich in protein, soymeal is used in food items. A large quantity of soyameal has been exported from India for many years. Oil mills continued to earn good income by selling cake oil.
The export of soyameal or cake has remained almost negligible since last year. According to the oil industries, due to stoppage of export of oil cake, oil mills have reduced the purchase of soybean. They have to meet the cost of production from oil only. In such a situation, oil is expensive and oil mills are refusing to buy soybean from farmers at good prices.
Indian cake is not being sold
According to the Solvent Extractors Association of India, the country’s leading organization of the oil industry, soybean production has been plentiful across the world. The production record of soymeal is estimated at 422 vessels. In such a situation, many countries are finding it expensive to import soya meal from India.
Oil mills are running in losses so they are not even crushing soybeans. Currently, the oil that the country’s consumers are consuming is mostly imported oil. In such a situation, its prices remain high because the government has increased the import duty.
Oil will be cheaper if there is subsidy
India’s soymeal (cake) seems to be costlier by $70 compared to other countries. Half of the mills have stopped production due to stoppage of exports. In such a situation, if the government provides any rebate scheme to encourage exports or at least subsidy on freight or transportation expenses, the export of cake will increase. While remaining within the ambit of WTO, 15 percent subsidy or incentive will have to be given on exports. With this, crushing of soybean being produced in the country will start. Farmers will be able to get good prices and oil will also become cheaper for consumers. – Dr. BV Mehta, Chairman Solvent Extractors Association of India
