Cooking oil prices in India have started cooling from the previous month’s highs, in part due to the reduction in import duty on edible oils and the Centre’s directive to the states to maintain stocks and prevent hoarding of the essential kitchen commodity.
The wholesale price of soyabean oil has dropped to Rs 129 per litre from Rs 142 a month ago, while that of palm oil has come down to Rs 121 from Rs 130. Sunflower oil now costs Rs 138 per litre, down from Rs 147. But mustard oil prices are expected to rule firm until the new mustard crop comes in in February-March, industry executives told ET, adding that a sudden spike in prices of edible oils in the upcoming festival season is unlikely.
“Prices of imported oils have corrected in the range of 5 per cent to 9 per cent in the last one month due to reduction in import duty. The recent diktat from the Centre to the state governments will keep the prices stable during the upcoming festive season. Prices have started cooling off and we do not see a sudden spike in prices,” said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil broker. “The kharif oilseeds have started arriving to the market, which too will keep a check on soyabean oil prices.”
On October 12, the Uttar Pradesh government issued a stock limit order, which will is expected to considerably bring down the prices of edible oils. Other states like Rajasthan, Gujarat and Haryana may impose stock limits soon, trade sources said.
The Centre on Monday asked the states to speed up the process of issuing stock limit notifications for edible oils in view of the upcoming festival season, which starts on November 4 with Diwali.
To provide near-term relief to consumers, the government has reduced import duty on crude edible oils—first in September and then again in October this year—helping bring down to zero. This will be in effect till March 2022.
“However, the government’s move may not provide much relief to the consumers, as the reduction in import duty by India has been offset by a rise in global prices of crude edible oil,” said BV Mehta, executive director of the Solvent Extractors Association of India. “Malaysian palm oil prices have shot up significantly, which is impacting our prices too, as we depend on imported oils.”
India Ratings & Research (Ind-Ra) has indicated that the imports of edible oils could touch 13.15 million tonnes for the November 2020–October 2021 period, and edible oil inflation will remain elevated in the near term.
Source:economictimes.com