Edible oil prices to decline further, says food ministry
24.11.2022 (Financial Express) - Edible oil prices are likely to soften further in the coming months, due to a decline in global prices and robust domestic crop prospects, a food ministry official said on Wednesday.
According to official data, landed prices of palm oil declined 37% to $910/tonne on Tuesday, from the levels prevailing a year back. However, the landed cost of crude soybean and sunflower oils declined marginally by 5% to $1,310/tonne and $1330/tonne, respectively, during the same period.
“We will see softening prices of edible oil in the next one month or so,” the official said at a briefing. India meets 58% of its annual edible oil consumption of around 24-25 million tonne (mt) via imports and annual imports are around 14 mt. Around 8 mt of palm oil is imported from Indonesia and Malaysia, while other oils, such as soya and sunflower, come from Argentina, Brazil, Ukraine and Russia.
The government has removed the import duty on crude palm oil, soybean and sunflower oils. However, after taking into account 5% agri-cess and 10% social welfare cess, the effective duty on three crude varieties is 5.5%. The modal retail prices of mustard oil, which has a share of more than 40% in domestic edible oil production, declined by 9% to Rs 170/litre on Tuesday compared to the year-ago period. However, retail prices of groundnut and soybean oils have witnessed an increase of around 9% and 2.5%, respectively, to Rs 191/litre and Rs 155/litre. Meanwhile, rabi or winter crops area under oilseeds such as mustard and groundnut has been reported at 13% more than the previous year, at 5.9 million hectares, so far.
The “edible oils and fats” category saw a negative inflation at 2.15% in October, mostly contributed by decline in domestic prices of edible oil since May. For mustard oil, prices declined 9.95% in October. Inflation in refined oil (sunflower, soybean and palm) was a marginal 0.74% because of a decline in global prices of edible oil.