Inedible oil
After petrol and diesel, the sharp rise of edible oil prices is singeing the ‘aam aadmi’.
The hot topic of discussion in every household is the shooting prices of edible oils. Last year, a litre of mustard oil would cost around Rs 130, today it's touching Rs 200! Prices spiked similarly for groundnut, soya, sunflower oils, and so on. These rising prices are coming at the back of a horrid one and half years for middle and lower classes. The pandemic has caused inflated medical bills, depleted earnings, and widespread joblessness. The already monetarily stretched out masses are now struggling to even feed their families.
Rising fuel and LPG prices have been adding to household budgets. Petrol and now, even diesel prices, have gone through the roof and crossed Rs 100 a litre. High fuel prices also means that cost of logistics would now be more expensive. This leads to higher food inflation, among other problems. Our government has said that unlocking and a good monsoon will ease the food inflation. They also believe that food inflation won't affect large numbers of Indians who are benefiting from free ration under the Pradhan Mantri Garib Kalyan Yojana. But what about the ever-vexed, always tortured middle class? Retail inflation in May crossed the Reserve Bank of India's (RBI) cautionary 6 per cent, and stood at 6.3 per cent. Wholesale price-based inflation raced to 12.94 per cent. Food inflation surged to 5.01 per cent.
The cost of food and essentials have been steadily rising in the last decade. We have paid more for fuel even when international crude prices were low, our savings pick-pocketed to fill government coffers. The pandemic further intensified our financial woes, and if even we, the privileged, have taken notice of steep prices, can you imagine the challenges faced by the less fortunate? 76 per cent Indians in any case can't afford nutritious diets, says a paper published last year in the Food Policy journal written by Kalyani Raghunathan, an economist at the International Food Policy Research Institute (IFPRI). A majority of Indians and at least 63.3 per cent of rural India, faced nutritional poverty, being able to spend more on cereals and proteins and less on dairy, fruits, and dark green vegetables. Their diets have surely deteriorated further with the pinching prices wherein meat and fish, egg, fruits, and pulses and products skyrockets to 9.03 per cent, 15.16 per cent, 11.98 per cent, and 9.39 per cent respectively in May. Added to the common man's basket of ignominies, is now vegetable oils that he simply can't afford.
The real cause behind the rise in prices of edible oils is a fascinating one. India is not 'Atmanirbhar Bharat' where edible oils are concerned, instead we are heavily dependent on oil exports. We went from being exporters of edible oil pre-Independence to becoming self-reliant from Independence till the 70s, and after two decades of ups and downs, finally became self-sustained in the 90s. Today, however, we are the largest importer of edible oil in the world bringing in oils worth $10 billion every year. An alleged case of corporate sabotage of an Argemone adulteration Dropsy case that killed 60 people in August 1998, a series of myopic government policy decisions that forced farmers to give up oilseed cultivations, followed by slashing of import duties on edible oils, murdered the indigenous edible oil market in India. An intriguing read on this topic authored by B M Vyas, former managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF), is available in the public domain. As per recent reports, 70 per cent of India's current edible oil demand is met through imports, making us susceptible to vagaries of international markets, which in turn has pushed up the prices of even mustard oil that's mostly used for domestic consumption.
Slashing import duties on palm oil, crude soya bean, and soya oil will soften prices. Thwarting speculatory trading of edible oils in the futures market will also help. India's production of oilseed has upped by over 44 per cent from 25.3 million tonnes in the last 5 years. To resolve the choppiness of the oil market in the long-term, oilseed cultivation would require an efficient, well-conceived strategy. This would also increase domestic production and help make India truly 'Atmanirbhar' in this sector. Government action is urgently needed to give some respite to the overburdened common man.
The writer is an author and media entrepreneur. Views expressed are personal
