| Subject: |
As demand drops, major oil brands are slashing prices by up to 15% |
|
KOLKATA: Mustard oil consumers may heave a sigh of relief as companies like Adani Wilmar, Ruchi Soya and others are set to reduce prices following a drop in demand.
Adani Wilmar, which sells oil under the Fortune brand, is the first mover with the company deciding to reduce prices by 8-10% this week. Ruchi Soya is likely to cut prices by 5-6%, while some players are planning to reduce prices by 10-15%.
"Mustard oil consumption has fallen over the past two to three months by almost 60% as consumers are not keen to shell out Rs 120-130 for a litre," Angshu Mallick, chief operating officer at Adani Wilmar, told ET.
"There is resistance among consumers. We are seeing that they are comfortable at a price band of Rs 100-110. We are looking at a reduction in prices from the first week of January." Vivek Puri, managing director of Puri Oil Mills, said January was always a tough month for mustard with sharp fluctuations in commodity prices.
"For the last few days, there is a continuous fall in mustard oil prices and it would continue to fall in the coming days as the new mustard crop is also expected after the second week of February," he said. Mustard oil prices were high in the past few months, which impacted consumption and led consumers to cheaper edible oils, he added.
Satyendra Aggarwal, COO at Ruchi Soya, said the company will reduce prices by 5-6% depending on the crop figure. There is a worry in the industry about the rabi crop as the winter chill, which is required for the mustard crop, is still missing. Senior officials of the Mustard Research Promotion Consortium said mustard production could be slightly less this year.
"If there is slight rain in this month, then production may rise slightly. Accurate estimation of mustard production would be clear by the end of January.
We request the government to do something to encourage oilseed farmers and protect the domestic mustard oil industry, like reduction in electricity tariff and incentives for farmers to increase production of mustard," an official said.
Industry executives said if it does not rain and if the winter chill is not there, then the crop will be down 9-10% this rabi season. Last year, total production of mustard seed was 50.8 lakh tonnes, according to the third advance estimate. "The acreage might go down by 6-7%," said BV Mehta, executive director of the Solvent Extractors' Association of India.
The government should reduce import duty on oilseeds to 5% from 30% so that oil obtained from canola seeds may be blended with rapeseed oil to produce an oil similar to mustard oil in look but with less pungent taste, Mehta said.
Source : economictimes.indiatimes.com
|