A Weaker Rupee Adds To Costlier Edible Oil, Pulses.

KOLKATA: Edible oil and pulses have started inching upwards with the onset of the festival season. Prices of these commodities have appreciated by 3% to 5% over the last fortnight and this trend is likely to continue till Diwali.

Talking to ET, Anshu Mallik, COO of Adani Wilmar, said: "The weakening of the rupee has made imports of edible oil costlier impacting the domestic edible oil sector. Prices have already gone up by Rs 2-3 per kg. I do not think that prices will further go up in the festival season and will remain stable at this level. They may only go up if something abnormal happens in international markets. But, as of now, there is no such signal. Prices are likely to get corrected after Diwali."

Palm oil constitutes nearly 80% of vegetable oil demand in India and India buys it mainly from Indonesia and Malaysia, and soyoil mostly from Brazil and Argentina. Vegetable oil imports increased by 14% to 9,13,179 tonne in July 2011 from 8,00,644 tonne in the same period of the previous year, according to latest industry data.

Mallik says domestic prices will cool off by October end when the new kharif crop will enter the market. "This time, production is expected to be better as there have been good rains in the oilseed producing regions of Madhya Pradesh, Rajasthan and Gujarat," Mallik said.

BV Mehta, the executive director of Mumbai-based Solvent Extractors Association (SEA), said there were two reasons for the surge in prices. "Festival season demand sometimes pushes up prices. The other reason may be higher imports," Mehta added."

Prices have appreciated by 3% -5%. This was long overdue. Pulses prices were really on a lower side. These are realistic prices. Even the MSP and the cost of production have gone up," said KC Bhartiya, chairman emeritus of India Pulses and Grain Association.

Source : economictimes.indiatimes.com