NEW DELHI: Sunflower oil, the heart-friendly fat, has finally turned pocketfriendly after retail prices crash to an eight-year low due to large
imports triggered by zero customs duty.
With an MRP of around Rs 60/kg, sunflower oil has replaced soya and groundnut to become the hot new sizzler in urban Indian kitchens.
Apart from price, the biggest bonus for sunflower oil consumers is that they can now be sure of getting pure quality. Till now, sunflower oil was so expensive that brands tended to blend cheaper soya oil in it. The new price equation has made such mixing unnecessary. India usually consumes 1.2 million tonnes sunflower oil every year.
“We have sharply reduced the MRP on sunflower oil in the last few weeks to bring it down to Rs 55/kg in Mumbai, its largest market,” said a senior official at Adani Wilmar, that makes ‘Fortune’, India’s largest-selling edible oil brand. Budget brands such as Fortune usually prefer to slash prices to give direct and visible consumer benefit. “I want the housewife to make a clear saving and also know how much she has saved when she buys Fortune,” said the senior official, who did not wish to be named.
Companies selling premium sunflower brands, however, are learnt to have opted for consumer promotions and offering extra quantity at the same price instead of reducing the MRP. “It is difficult for an expensive brand to suddenly become cheaper because it makes consumers start wondering what’s up. So it is simpler to offer the same discount through other means instead of a direct slash in prices,” said a senior official in a leading sunflower oil brand.
Market players in Mumbai say the zero customs duty has made imported sunflower oil at least Rs 3/kg cheaper than imported soya oil and local groundnut oil. If the duty remains zero, almost 400,000 tonnes sunflower oil may get imported from Russia and Ukraine over the next four months, they added. Last year imports plummeted 90% because India imported less than 20,000 tonnes crude sunflower oil due to record-high international prices.
However, there is little likelihood of prices going down further as the international market has started firming up again. “Price of sunflower oil in Russia and Ukraine have begun rising to reach at par with soya oil. So we don’t expect any more dramatic movement,” said an official at one of India’s largest vegetable oil refining company in Mumbai. Because of the attractive price, consumers are making a beeline for sunflower oil. Sales volume has increased at the retail level, at the cost of soya and groundnut oil.
Groundnut expeller oil prices have dropped to Rs 54/kg, the lowest in several seasons. Farmers growing sunflower have little reason to start worrying. Though processors are buying sunflower seed at a tad below MSP right now, the market is expected to start looking up by mid-February.
“The current drop in prices is also due to the bunching up of imported palm oil cargoes at port that had been waiting for the duty increase. Once this oil gets sold, the pipeline will contract again to normal levels. Moreover, demand for palm oil, that becomes slow in winter, will re-surface once the weather becomes warmer. We are expecting prices to see an upside next month,” said a trader here.
Source : The Economic Times