Edible oil prices have fallen by 8-10 rupees per kg over the past 30 days; may decline further: Industry
Edible oil prices have fallen by 8-10 rupees per kg over the past month mainly due to lower import duties and could drop 3 to 4 rupees per kg in the coming months due the increase in national oilseed production and the downward trend in world markets, according to the industry organization SEA.
“The past few months have been painful for the Indian edible oil consumer in large part due to the very high international prices of all palm, soybean and sunflower oils,” said the president of the Indian Extractors Association. of Solvents (SEA), Atul Chaturvedi, in a statement.
SEA had advised its members before Diwali to cut prices to the maximum, he said, adding that the Center had also reduced import duties on edible oils.
“We are happy to confirm that all of these actions have caused edible oil prices to drop by around Rs 8-10 per kg over the past 30 days,” Chaturvedi said.
SEA said its members have reacted quickly in the past by passing on the benefits of lower prices to consumers.
“With the likelihood of lower import parities, our members have agreed to pass the reduced costs on to our consumers as seasonal greetings. We believe that prices would be reduced by around 3-4 rupees per kg for the foreseeable future by our members. This should provide relief to our edible oil consumers this holiday season, ”said SEA President.
With a large soybean crop of around 120 lakh ton and a groundnut crop of over 80 lakh ton, Chaturvedi said edible oil prices would now remain under control.
“The icing on the cake is that the high prices of mustard seeds have sparked a massive response from the supply side of farmers and they have planted an unprecedented mustard crop on around 77.62 lakh hectares. This figure is nearly 30% higher and has the potential to increase domestic mustard oil availability by 8-10 lakh tonnes in the coming year, ”he added.
Chaturvedi said the global edible oil price trend is “relatively bearish and we believe prices will continue to decline”. According to SEA, India’s dependence on edible oil imports accounts for nearly 65 percent of total consumption of around 22-22.5 million tonnes. The country imports 13 to 15 million tonnes to bridge the gap between demand and domestic supply.
During the last two marketing years (November to October), due to the pandemic, imports have been reduced to almost 13 million tonnes.
“In 2019-2020, the import fell to 13.2 million tonnes worth around Rs 71,600 crore. In 2020-2021, India imported a similar amount, but the import bill jumped 63% and reached an alarming level of Rs 1.17 lakh crore due to the rise in international prices of edible oils ”, SEA said last month.