Edible Oil makers not to Hike Prices.

MUMBAI: A pull back in rupee's value against the dollar has ensured that edible oil makers do not hike prices on consumer packs. Indian edible oil manufacturers would have taken a price hike but for rupee's spurt starting early this week.

The local firms have been observing the scenario after rupee depreciated against the dollar to touch Rs 50 a month ago.

A depreciating rupee makes imports costlier in a country that imports nearly half of its annual edible oils requirements. "Prices will remain stable now. Had the rupee continued to weaken against the dollar, we would have had to take prices up by Rs 2-3 a litre," said Anghsu Mallick, chief operating officer, Adani Wilmar, which is the market leader in the total ROCP (refined oil in consumer packs) market, with a volume share of about 15%.

India's total edible oil imports are estimated at 6 million tonne while annual domestic consumption stands at about 13 million tonne. This makes India one of the largest importers of vegetable oils.

On Friday, the rupee spurted 74 paise to Rs 48.76/77 against the US dollar along with a rise in the domestic equities market. The appreciation in the value of the rupee started early this week. The rupee had closed 32 paise up at 49.50 against the US dollar on Tuesday.

Four months ago, Adani Wilmar and Ruchi Soya had reduced prices on consumer packs by 3-6% following the weakening of crude palm oil prices globally and reduced prices of soya with the onset of a favourable monsoon. However, with markets remaining volatile and the rupee breaching Rs 50 against the dollar, companies were considering reversing the price reduction.

Given the highly competitive nature of the edible oils business, most players are expected to hold on to the prices now that the rupee has strengthened. But one industry official pointed out that import is only one factor which is taken into consideration while determining pricing. Other aspects like inflation continue to weight heavy on the economy.

The total value of the Indian edible oil industry is around Rs 75,000 crore (15 million tonne), including packaged and loose oils, as per Nielsen. Besides Adani Wilmar, Ruchi Soya (Ruchi Gold and Mahakosh) and Cargill are the other two leading players in the Indian market.

Source : timesofindia.indiatimes.com