NEW DELHI: Sunflower oil, considered among the healthiest of edible oils, has begun to lose its premium over soya and palmolein with global prices shooting up of late for the latter two. Prices of palmolein and soya oil have almost levelled with sunflower oil, owing significantly to a phenomenal demand from India. That has dented global stocks of both soya and palmolein and upped the prices for all three cooking medium.
India is the fourth-largest edible oil economy in the world after the US, China and Brazil and accounts for 10% of the world vegetable oil import and consumption. However, it accounts for only 7.4% of the world’s oilseed output.
“Consumer prices function on a tangent quite at variance with wholesale prices and are based to a good extent on domestic demand. Retail prices have already responded to domestic demand. Moreover, there will be a time gap between global prices going up for May delivery contracts and the translation of that in domestic markets,” said an official of the Central Organisation for Oil Industry and Trade (COOIT). However, one can expect prices to go up by end-May. Stocks in India are at their highest this year at an estimated 7.5 lakh tonnes, 1.5 lakh tonnes higher than last year. This includes sizeable imports contracted for May-August.
Although the bumper imports (on account of duty reduction from 25% to zero on crude soya oil on March 23) are expected to tone down in April after the marked increase in February, the May-August period is usually the period when domestic demand is the highest. “Traders are piling up stocks to make most of the zero import duty on all crude edible oils (refined oils still carry a 7.5% import duty) since there is a strong expectation that the new government will re-impose duty after assuming power,” the official said.
The current import price for RBD palmolein works out to $830 per tonne, while that of soya oil works out to $885 per tonne, according to trade. For sunflower oil, the price works only slightly higher, to $890 per tonne. India has imported a whopping 6-7 lakh tonnes of edible oil in the last four years.
Source : The Economic Times