Despite Gujarat government's intervention in edible oil market, no relief in prices to consumers

Last week the Gujarat government announced that it will provide groundnut oil of one liter pack at Rs 100, at 50 per cent subsidised rates. Yet, the prices of edible oil are seeing an upward trend and the people are not getting any respite.

On Tuesday, 17-liter groundnut oil tin price was quoted Rs 2,850, the highest in this calendar year so far. Palm oil is trading at Rs 2,050 for 17-liter tin.

The reason behind this is that most of the oil processing units are closed as there is no stock of groundnut in the market and the imports of palm crude oil were opened after a short break. Due to the festival season demand, the retail market is high which is pushing up the prices, said Kishore Viradiya, President of Saurashtra Oil Mill Association.

On the other hand, the state government is going to distribute 71 lakh liter of groundnut oil to the ration card holders under the National Food Security. The supply is underway and before Gokulashtami the government targets to distribute to the poor people, said Tushar Dholakia, Director of the Gujarat Foods and Civil Supplies Corporation.

Dholakia said that the state government is procuring 1.42 crore litres of groundnut oil from the open market, the rest 71 lakh litres will be distributed on the eve of Diwali.

Viradiya said, "This could trigger prices for the simple reason that the state has not crushed oil in its own groundnut stock, it is procuring oil from the open market. Its intervention is limited to 71 lakh families, rest of the commoners or low income groups are left at the mercy of the open market and that is why the state government's announcement has little impact on the market prices."