There is no respite for consumers from cooking oil price inflation.
Despite duty reduction by the central government on import of palm oil, prices of most of the cooking oils have increased by about 8% in the last two weeks.
The price of crude palm oil in Mumbai has increased 4.61% in a week, 9.66% in a month and by close to 72% from a year ago. Crude soyabean oil also has become costlier by about 10% in the past fortnight.
The retail prices of cooking oils have nearly doubled in the domestic market.
Sandip Bajoria, chief executive of brokerage and consultancy firm Sunvin Group, said the prices were increasing primarily on global cues.
“Globally, there are concerns due to the hot and dry weather conditions in Brazil, Argentina, Canada and the US,” he said. “In India too, delayed monsoon has been a cause of concern.”
Prices of soyseeds and rapeseeds also increased in the domestic market by about 8% in 15 days.
Sudhakar Desai, president of the Indian Vegetable Oil Processing Association, cited delayed monsoons, a depleted pipeline during the second wave of Covid and higher demand after clarity emerged on Indonesian and Indian duty among factors that are affecting the prices.
Prices are expected to stay firm for a month, he said.
The Solvent Extractors’ Association has given a proposal to the government to import edible oils from neighbouring countries and supply to the weaker sections of the society. “We have requested that the government import edible from Nepal and Bangladesh, which enjoy zero-duty advantage under SAPTA (South Asian Free Trade Area), and distribute it through the public distribution system,” said BV Mehta, executive director, SEA.
According to Mehta, the two emerging softening factors for edible oils are the recent revival of monsoon in India and an expected bumper sunflower oil production in Ukraine.
Increasing use of vegetable oils for biodiesel is also causing global prices to rally.
“About 20% of the 240 million tonnes of global edible oil production is now used for biodiesel production,” said Mehta.
According to the SEA, India imported cooking oil worth Rs 75,000 crore in 2019-20 (November-October), while in 2020-21, this is expected to increase to Rs 1.20 lakh crore, giving the government an estimated revenue of Rs 45,000 crore in duties.