Global edible oil prices moderate, but higher than last year
World prices for soybeans, sunflower oil and palm oil have moderated by around 2-4% since Indonesia lifted the ban on palm oil exports last week .
According to data from the Ministry of Food, the current prices of three varieties of edible oil – which constitute about 96% of India’s edible oil imports – are about 31% to 36% higher than prevailing prices. one year ago.
Global crude palm oil, which accounts for about 61% of the country’s edible oil imports, fell about 4% to $1,700 a ton on Wednesday from $1,770 a ton a week ago. Indonesia, the world’s largest palm oil exporter, lifted the export ban on May 19. However, the current price of palm oil is about 36% higher than the $1,250 per ton that prevailed a year ago.
Soybean oil prices also saw a 4% drop to $1,755 a ton in a week, compared with prices 32% higher at $1,330 a ton a year ago.
Similarly, in the case of sunflower, there was a marginal one-week price moderation to $2,020 per tonne. Current prices are 33% higher than the $1,520 per tonne reported a year ago.
India imports about 55% of its annual edible oil consumption. Annual imports of edible oil are around 13 million tonnes (MT) – mainly palm oil (8 MT), soybean (2.7 MT) and sunflower (2 MT). While palm oil is imported mainly from Malaysia and Indonesia, soybean and sunflower oils are imported mainly from Argentina and Ukraine.
In a bid to rein in rising prices, the government on Tuesday allowed duty-free imports of crude soybean and sunflower oils in this fiscal year and next. The tax exemption will be subject to an annual cap of 2 MT for each oil, which will be more than enough to meet the needs of domestic refiners and facilitate the supply of the domestic market.
Import duties on crude palm oil are waived until September 30.
Food Secretary Sudhanshu Pandey said the decision to set the amount of duty-free imports of sunflower and soybean oil would allow exporting countries to plan their harvests and shipments.
Earlier this month, while stating that India has an optimal stock of edible oil, the government said that about 2.1 MT is the current stock while 1.2 MT of edible oil were in transit. “The country has enough money to cover the lean season due to Indonesia’s export ban,” he said.
Indonesia had imposed a ban on palm oil exports on April 28, which was lifted after three weeks.
Domestic edible oil prices have risen by about 30% year-on-year, taking inspiration from high world prices due to a production shortfall. Rising edible oil prices have in recent months been a major driver of retail food inflation, which stood at 8.38% in April, higher than headline inflation of 7, 79%.
“The government took this decision to relieve consumers in this volatile market and to control inflation,” said Atul Chaturvedi, chairman of the Solvent Extractors Association of India.