Cooking oil prices rise 50% in a year

Edible oil prices have shot up more than 50 per cent in a year's time on supply constraints. Production shortages, delay at the ports and lower imports have led to cooking oil burning a hole in consumers' pockets.

However, the government is hopeful that the prices would soften in the days ahead.

According to government data, retail prices of edible oils have shot up by 55.55 per cent in over a year.

The retail price of vanaspati has increased by 55.55 per cent to Rs 140 a kg on May 8 this year from Rs 90 per kg a year ago. The retail price of palm oil has risen by 51.54 per cent to Rs 132.6 per kg from Rs 87.5 per kg, soya oil by over 50 per cent to Rs 158 per kg from Rs 105 per kg, while that of mustard oil by 49 per cent to Rs 163.5 per kg. The retail price of groundnut oil has gone up by over 38 per cent to Rs 180 per kg from 130 per kg during the oneyear period.

"The global demand-supply situation has been leading to price rise. Production has been down last year due to the pandemic. However, the demand started improving with the progress of vaccination," said Ajay Kedia, managing director, Kedia Commodities.

Further, the labour issues in Malaysia and Indonesia have been affecting production of palm oil and sunflower oil. Last week Malaysian palm oil futures touched their highest level since 2008. Soybean futures in Chicago too are trading close to multi-year highs.

"In India, we had good production of edible oil seeds. But this did not help prices much," said Kedia.

Indian edible oil refiners also had curtailed palm oil imports for May and June as most states have imposed curbs on hotels and restaurants.

However, the government expects that release of imported stock, stuck at key ports, will help cool prices in the coming days.

According to food secretary Sudhanshu Pandey, there was holding of some stock at Kandla and Mundra ports due to delay in clearances. Before clearing, tests were done by various agencies as part of the general risk analysis in view of the Covid situation.

"That problem has been addressed along with customs and Food Safety and Standards Authority of India. With that stock getting released in the market, we hope to see the softening impact on the oil prices," he said in a virtual press conference on Monday.