New Delhi, Retail edible oil prices in the country will start softening from December with arrival of new crops and a possible decline in global rates, Food Secretary Sudhanshu Pandey said on Friday.
Retail prices of edible oils in India, which imports 60 per cent of its requirement, have shot up to 64 per cent in the past just one year, in line with the global developments.
“However, looking at the declining trend shown in prices of edible oils for December month in the futures market, it looks like retail prices will start declining. But, there won”t be any dramatic decline as there is still global pressure,” Pandey told reporters.
The arrival of new crops and a likely drop in global prices should help in softening of edible oils” retail prices in the country, he said.
Citing reasons for the sharp rise in domestic edible oils prices, the secretary said one major reason is that prices have gone up in the international markets as many countries are aggressively pursuing the biofuel policy using their own resources.
For instance, Malaysia and Indonesia, which are major suppliers of palm oil to India, are using palm oil for their biofuel policy. Likewise, the US is diverting soyabean for biofuel making, he said.
Moreover, palm oil and soyabean oil are the top-two oils in terms of share in the Indian market. Palm oil is about 30-31 per cent, soyabean oil is 22 per cent.
“The country”s dependence on edible oils is 60 per cent. If the international price is high, its impact gets passed on,” he said.
Another factor that led to an increase in global rates was excessive buying from China, sources said.
Pandey said the silver lining, however, was that the kind of price increase seen in the global market was not seen in the Indian edible oils segment due to the government interventions.
While there was a 22 per cent increase in global prices of soyabean oil and 18 per cent in palm oil during last week, impact on the Indian market has been less than two per cent, he said.
The Indian government took many measures like cutting import duty, among other steps, to keep prices stable in the retail markets, he added.
As per the government data, retail palm oil prices rose 64 per cent to Rs 139 per kg on September 3 from Rs 85 per kg a year ago.
Similarly, retail price of soyabean oil rose 51.21 per cent to Rs 155 per kg from Rs 102.5 per kg, while that of sunflower oil increased 46 per cent to Rs 175 per kg from Rs 120 per kg in the said period.
Mustard oil prices in the retail markets rose 46 per cent to Rs 175 per kg on September 3, from Rs 120 per kg in the year-ago period. Groundnut oil rates rose 26.22 per cent to Rs 180 per kg from Rs 142.6 per kg a year ago.
Vanaspati rates also rose 59 per cent to Rs 135 per cent from Rs 85 per kg in the said period.
“Though mustard production has gone up, prices still have increased taking cues from other edible oils,” the secretary said.
On re-routing of third country originating oils through Nepal and Bangladesh under the SAFTA pact, he said, “This concern has been raised and the matter has been taken up with both the countries.”
The country imported 93,70,147 tonne of edible oil between November 2020 and July 2021, as per data from the Solvent Extractors Association of India (SEA). PTI