Rising Edible Oil Prices, Govt Imposes Stock Limits – Free PDF Download


What has happened?

  • The Centre on Sunday imposed stock limits on traders of edible oils and oilseeds, barring importers and exporters, till March 31, in a bid to check rising domestic prices and give relief to consumers.
  • Already, futures trading in mustard oil on NCDEX platform has been suspended from October 8, it said.
  • The Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2021, has been issued with immediate effect from September 8, it added.
  • Edible oil prices in the domestic retail markets have shot up sharply by up to 46.15% in the last one year due to global factors and local tight supply situation, as per government data.
  • “The centre’s decision will soften the prices of edible oils in the domestic market, thereby bringing great relief to consumers across the country,” The Food and Consumer Affairs Ministry said in a statement.

Who will decide the stock limit?

  • As per the order issued to all states, state governments and union territories will decide the stock limit to be imposed on edible oils and oilseeds,
  • After taking into account the available stock and consumption pattern of that particular state or UT.
  • The states have been asked to ensure stock details of edible oils and oilseeds are regularly declared and updated on the central government’s portal.


  • However, certain importers and exporters have been exempted from the stock limit.
  • The exemption is given to those exporters (being a refiner, miller, extractor, wholesaler or retailer or dealer) who have an Importer-Exporter Code Number issued by the Director General of Foreign Trade (DGFT) and
  • Are able to demonstrate that the whole or part of his stock are meant for exports and to the extent of the stock meant for export.
  • The exemption is also given to those importers (being a refiner, miller, extractor, wholesaler or retailer or dealer),
  • Who are able to demonstrate that part of his stock in respect of edible oils and edible oilseeds are sourced from imports, the ministry said.

But what about amendment to the act?

  • Last year, as part of ‘reforms’, the Centre had amended the Essential Commodities Act, 1955 to free up oilseeds, pulses, onions etc from stock limit imposition.
  • However, the Supreme Court has stayed the implementation of the Act.

Reason for the rise in prices?

  • According to the ministry, high prices of edible oils in the international market have a substantial impact on the domestic edible oil prices.
  • However, the government has formulated a multi- pronged strategy to ensure that prices of essential commodities like edible oils remain controlled.
  • Measures like rationalisation of import duty structure, launching of a web-portal for self-disclosure of stocks held by various stakeholders had already been taken, it said.
  • India meets more than 60% of its edible oil demands through imports.
  • Edible oil is the third largest imported commodity, next only to crude oil and gold.

But why tackling the price now?

  • With just months left for the elections in five states, the Centre has been taking measures to control prices.
  • In August, it reduced the import duty on sunflower and soya bean oil.
  • Earlier this year, the spike in prices of dal had forced the Centre to first ease import restrictions and then, on July 2, impose stock limits on processors and traders.

  • 8,844 crore is the Government of India share and Rs.2,196 crore is State share and this includes the viability gap funding also.
  • Under this scheme, it is proposed to cover an additional area  of 6.5 lakh hectare (ha.) for oil palm till the year 2025-26 and thereby reaching the target of 10 lakh hectares ultimately.
  • The production of Crude Palm Oil (CPO) is expected to go upto 20 lakh tonnes by 2025-26 and upto 28 lakh tonnes by 2029-30.

Q) Which of the following statement is correct?

  1. India’s rank in the global groundnut production is 2nd
  2. India’s rank in global rapeseed production is 3rd
  1. 1 only
  2. 2 only
  3. Both 1 & 2
  4. None of the above




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