Cooking oil prices start softening

After more than doubling in the past one year, edible oil prices have started softening in the last one month. "Edible oil prices in India are showing a declining trend across a wide array of oils. As per data from the Department of Consumer Affairs, over the past month, the prices of edible oils are now coming down," an official statement said on Wednesday.

Palm oil prices have dropped 19 per cent from Rs 142 per kg on May 7 to Rs 115 per kg, sunflower oil prices dropped 16 per cent to 157 per kg, price of soya oil has come down from Rs 162 per kg to Rs 138 per kg in the past few weeks. Mustard oil was down 10 per cent, groundnut oil 8 per cent and vanaspati 8 per cent at Rs 157, Rs 174 and Rs 141 per kg, respectively.

“Expectations of a production recovery in Malaysia and Indonesia amid slowing demand have pulled down the prices. Due to the second wave, exports of edible oils were affected in these countries. In the case of soya oil, the surge in the interest for renewable energy too had supported prices. However, the market now finds that the blending requirements in the US would be reduced due to the intervention of the environmental protection agency. This has cooled down prices,” said Ajay Kedia, MD, Kedia Commodities.

The international price trends are directly affecting the domestic edible oil market as India imports a significant quantity of the commodity to meet its demand. As per reports, India meets 56 per cent of its domestic demand through imports. The effective rate of import duties, including agriculture infrastructure and development cess and social welfare cess, ranges from 35 per cent to 59 per cent for edible oils. This too has led to higher edible oil prices in India.

Despite the rising prices, the industry has been asking the government not to cut the import duties.