With the Centre lifting the ban on exports of certain edible oils, groundnut oil mill owners in Gujarat have a reason to cheer.
With the Centre lifting the ban on exports of certain edible oils, groundnut oil mill owners in Gujarat have a reason to cheer. In a notification on Monday, the office of the director general of foreign trade allowed the exports of groundnut oil, sesame oil, soybean oil and maize (corn) oil in bulk. Speaking to FE, Sameer Shah, president of Saurashtra Oil Mills Association, said: “In 2008, the ban was imposed when domestic prices for groundnut oil were high. Since then, state bodies including us have been making representations to the Centre for allowing exports.”
Export was initially banned in March 2008 for a year, and extended it from time to time. In October 2012, the ban on export of edible oils was extended until further orders. According to Shah, exports of edible oils, which had till this week been restricted to consumer packs of up to 5 kg each, will increase by two to three times, and also lead to increased incomes for local producers including the farmers.
“We are getting enquiries from abroad for groundnut oil. Since it is a premium product, about 10-15% of the local demand had shifted to cheaper edible oils. But now exports will be a viable option. This year, the crop also has been good, and now producers can afford to export. Local industries and farmers will definitely be benefitted by this move,” said Shah.
However, traders in the state rue that the move has come “too little and definitely too late”. According to them, prices for groundnut oil in India are R100 per kg whereas the price in China is currently R92 per kg, which makes exports an unlikely alternative. Speaking to FE, Rajkot-based trader Niraj Adhiya said: “If the government had brought in this measure about four to five months ago, at the beginning of the season, then it would have been greatly beneficial. At the moment, demand is slow all over the world. Consumption is lesser at this time of the year anyway.”
“At the moment, lifting the ban on exports makes no difference. But if the demand picks up within the next two to three months, then it will be beneficial,” Adhiya added. Gujarat accounts for 40% of the total production of groundnut oil in India.