India’s edible oil market is facing reduced demand, increased import duty is not a fix

India’s retail food inflation has been high since early 2022, averaging 7 per cent annually in both 2022 and 2023. It has risen further for the first eight months of 2024, averaging 8 per cent. In response, the government introduced several interventions to shield consumers, many of which have been rolled back last month. These include freeing up white rice exports, halving of export duty on parboiled rice and onions and increasing import duties on edible oils. To support soybean farmers, the government also announced procurement of over 5 million metric tonnes (MMTs) of the upcoming kharif crop at in Karnataka, Maharashtra, Madhya Pradesh, and Telangana. That is about 40 per cent of the estimated crop. While more policy announcements, especially on ethanol prices from crops like rice and sugarcane, are expected, this article focuses on the edible oil sector. On 13 September 2024, the government raised import duties on edible oils, arguing this would increase domestic demand for ...