International prices, higher import duties cited for rising edible oil prices
The prices of edible oil and turdal have registered a sharp increase over the past year while those of rice and wheat have registered a moderate increase, according to a comparative study of the prices of certain essential products as reported in different places in Tamil Nadu, besides Pondicherry.
According to data provided by India’s Ministry of Consumer Affairs, edible oil prices (only two variants – sunflower oil and palm oil – are chosen for the study) have increased by around 50 yen. the kg. In the four given cities of Tamil Nadu, the prices of sunflower oil, widely used by the middle class, have increased by about 60 per kg and in Pondicherry the difference is 50 per kg. Likewise, palm oil, used by the poor, increased by 47 per kg in Pondicherry. For Tamil Nadu, the product has become more expensive by at least 50 per kg. As for the turdal, the increase was of the order of 20 to 25% except in Chennai, where the difference is marginal. As for urad dal, the hike was not that noticeable.
With the exception of Pondicherry, rice has remained stable in Tamil Nadu. The situation for wheat is similar in the State and even in the territory of the Union as well. In fact, in Coimbatore, the price of wheat has been on a downward trend – a drop of 6 per kg.
A seasoned administrator said the situation in the state was a feature of all of India, as the country met, through imports, much of the need for edible oil and pulses. The increase in the price of edible oil is greater than that of pulses for two reasons: higher international prices and higher import duties. The Center is considering whether it can reduce the duty so that there is a drop in prices. However, there is another view that the reduction could lead to a further increase in prices internationally given the expected higher demand from India.
KR Shanmugam, director of the Madras School of Economics, said the prices of eggs and non-vegetarian foods too [both of which are not included in the list of commodities being monitored by the Central department] have experienced a sharp increase over the past year.
What the administrator and the economist agree on is that the classic rules of supply and demand dynamics are not applicable at the present time due to containment. While the transport of essential commodities is exempt from the lockdown, their movement and availability are not completely isolated from the restrictions. Therefore, it affects their prices.
A senior state government official said the government has the Price Stabilization Fund to deal with any situation.
In addition, thanks to the special public distribution system, palm oil and turdal are supplied at subsidized rates, he said.