Edible oil prices down by up to Rs 10 in last 30 days, could fall further

Edible oil prices declined by up to Rs 8-10 per kg in last one month mainly on the back of lower import duties.

New Delhi: Edible oil prices declined by Rs 8-10 per kg in last one month mainly on the back of lower import duties and may fall by Rs 3-4 per kg in coming months on higher domestic output of oilseeds and bearish trend in global markets, according to industry body SEA.

"The last few months have been harrowing for the Indian edible oil consumer largely on account of very high international prices of all oils viz palm, soya and sunflower," Solvent Extractors' Association of India (SEA) President Atul Chaturvedi said in a statement.

SEA had advised its members before Diwali to reduce prices to the maximum extent possible, he said, adding that the Centre also reduced import duties on edible oils.

"We are happy to confirm all these actions have resulted in edible oil prices coming down by around Rs 8-10 per kg in the last 30 days," Chaturvedi said.

SEA said its members have been responding promptly in the past in passing on the benefit of lower prices to the consumers.

"With likelihood of lower import parities, our members have agreed to pass on the reduced cost to our consumers as seasons greetings. We feel the prices would be reduced by around Rs 3-4 per kg in foreseeable future by our members. This should provide relief to our edible oil consumers during festive season," the SEA president said.

With a large soyabean crop of around 120 lakh tonne and groundnut crop in excess of 80 lakh tonne, Chaturvedi said the edible oil prices would now remain in check.

"The icing on the cake is that high mustard seed prices have elicited a massive supply side response from the farmers and they have planted an all-time high mustard crop in about 77.62 lakh hectares. This figure is higher by almost 30 per cent and has the potential of increasing domestic mustard oil availability by 8 to 10 lakh tonnes in coming year," he added.

Chaturvedi said the global trend of edible oil prices is "relatively bearish and we feel prices would continue to move downward."

According to SEA, India's dependence on import of edible oils is nearly 65 per cent of the total consumption of about 22-22.5 million tonne. The country imports 13-15 million tonne to bridge the gap between demand and domestic supply.

For the last two marketing years (November to October), due to the pandemic, import has reduced to nearly 13 million tonne. Also Read: iPhone XR at less than Rs 20,000 on Amazon? Here’s why you should not fall for this deal

"In 2019-20 the import dropped to 13.2 million tonne valued about Rs 71,600 crore. In 2020-21, India imported similar quantity but import bill jumped by 63 per cent and touched an alarming level of Rs 1.17 lakh crore due to hike in international prices of edible oils," SEA had said last month. Also Read: Beware! THIS WhatsApp scam may take away your hard-earned money; here’s how to stay safe