Govt asks edible oil firms to cut cooking oil prices as global prices fall
The Centre on Thursday asked edible oil companies to cut the prices of cooking oils in line with the fall in global prices for the benefit of consumers.
04/05/2023 (Business Standard) - The Centre on Thursday asked edible oil companies to cut the prices of cooking oils in line with the fall in global prices for the benefit of consumers.
A major importer of edible oils, India imported cooking oils worth Rs 1.57 lakh crore during 2021-22 marketing year (November-October).
It buys palm oil from Malaysia and Indonesia while soyabean oil is being imported from Argentina and Brazil.
"The decline in the price of edible oils should be passed on to consumers expeditiously," Food Secretary Sanjeev Chopra said during a meeting with leading industry representatives here.
Representatives from Solvent Extraction Association of India (SEA) and Indian Vegetable Oil Producers' Association (IVPA) were present at the meeting to discuss further reduction in the retail prices of cooking oils amidst a fall in the global prices, an official statement said.
Mother Dairy, which sells cooking oils under Dhara brand, on Thursday said it has reduced the maximum retail prices by Rs 15-20 per litre and the new stock will hit the market next week.
As per the government data, the retail price of packed groundnut oil on Thursday stood at Rs 189.13 per kg, mustard oil Rs 150.84 per kg, vanaspati Rs 132.62 per kg, soyabean oil Rs 138.2 per kg, sunflower oil Rs 145.18 per kg and palm oil Rs 110.05 per kg.
The food ministry said that international prices of imported edible oils are on a downward trend which gives a positive scenario for the edible oils sector in India.
"The industry informed that the global prices of different edible oils have fallen by USD 200-250 per tonne in the last two months but it takes time to reflect in the retail markets and the retail prices are expected to come down shortly," the statement said.
Edible oil associations have been advised to take up the issue with their members immediately and ensure that the MRP (Maximum Retail Price) of each oil be reduced in line with the decline in the international prices of edible oils with immediate effect.
Besides, the food ministry has asked for lowering the price at which edible oils are supplied to distributors by manufacturers and refiners.
Whenever a reduction in price to distributors is made by the manufacturers/ refiners, the benefit should be passed on to the consumers by the industry.
Some companies, which have not reduced their prices and their MRP is higher than other brands, have also been advised to reduce their prices," the statement said.
Other issues like price data collection and packaging of edible oils were also discussed during the meeting.
Earlier also, the MRP of edible oils were reduced by the industry.
The reduction in oil prices had come in the wake of reduction of international prices and reduced import duty on edible oils making them cheaper.
"With the edible oil prices beginning to show a downward trend and are set to witness further reduction to be made by the edible oil industry, the Indian consumers can expect to pay less for their edible oils. The falling edible oil prices will help in cooling the inflation as well," the statement said.
The Department of Food and Public Distribution is closely monitoring and reviewing the prices of edible oils and steps in whenever any intervention is required to ensure the affordability of edible oils, it added.
The international and domestic prices of edible oils were on an upward swing during 2021-22 due to many global factors, including higher input and logistic costs.
"However, now the edible oil prices in the international market are witnessing a decline. The fall in the prices of edible oils in the domestic market is gradually being reflected in the domestic market which is providing relief to the consumers," the statement said.
India imports more than 50 per cent of its total edible oil requirements.
From November 2022 to March 2023, imports of edible oils rose to 69,80,365 tonnes from 56,42,918 tonnes in the corresponding period of the previous oil marketing year.
India's edible oil import bill rose 34 per cent to Rs 1.57 lakh crore in 2021-22 marketing year while in volume terms it rose 6.85 per cent to 140.3 lakh tonnes.