New Delhi: The rise in the price of edible oil is showing no signs of stopping.The price of edible oil remains at a high level in the retail market. The price of soybean oil has reached Rs 160-70 per liter. The price of edible oil had increased significantly during the festive season. During this period, there was a 37 percent jump in the price of palm oil in October. Similarly, mustard oil became costlier by 29 percent, soybean oil by 23 percent, sunflower oil by 23 percent and groundnut oil by four percent. It was believed that the prices of edible oil may fall after the festivals. But there was no relief in prices in November. In a report by CNBC, government sources were quoted as saying that it has no control over the reasons for the increase in the price of edible oil. The price of edible oil is increasing at the international level. Also,the palm oil season in Southeast Asia has been weak. The government has not yet decided to cut import duty. For the benefit of domestic farmers, the government had increased the duty on import of edible oils.
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Why did the price increase?
On September 14, the government had increased the import duty on crude and refined edible oil to promote oilseed crops in the country. The duty on crude palm, soybean and soybean oil was increased from 5.5% to 27.5% while the duty on refined oil was increased from 13.7% to 35.7%. In october, the government had expressed concern over the rising price of edible oil. After this, the effects of increasing import duty were discussed among various ministries and measures to provide relief to consumers were discussed.
It was believed that due to the arrival of new crops of soybean and groundnut in the market in October, the price of oil would fall but it did not happen. India imports 58% of it’s edible oil requirement. The government is promoting the cultivation of oilseeds to stabilize the supply and protect the domestic market from global impact.
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fastest bounce
In November, the benchmark linked to world food commodity prices saw the biggest jump since April 2023. Food and Agriculture Institution said this happened due to increase in the price of edible oils. The FAO Food Price Index averaged 127.5 points in November,which is 5.7 percent more than a year ago. The FAO Vegetable Oil Price Index rose 7.5 percent in November compared to October. It has increased by 32 percent compared to last year. Palm oil has increased due to heavy rains in Southeast Asia. Due to heavy demand, the price of soybean oil has increased, while due to tight supply, the price of othre oils has increased.
What are the main reasons behind the fluctuations in edible oil prices in India?
Interview with Dr.Arjun Mehta, Edible Oil Market Expert
time.news Editor (TNE): Good afternoon, Dr. Mehta. Thank you for joining us today to discuss the rising prices of edible oils in India. Can you start by explaining what factors have contributed to the recent surge in prices?
Dr. Arjun Mehta (AM): Good afternoon! Certainly. The prices of edible oils have been soaring due to a combination of domestic and international factors. Locally, the government increased import duties on crude and refined edible oils to promote domestic oilseed cultivation. This move, while aimed at stabilizing the market, has led to important price hikes.
TNE: It’s captivating to note that the prices have risen despite expectations of a decline post-festive season. What influenced this unexpected trend?
AM: Yes, it’s quite surprising.Typically, we see prices drop after the festivals. Though, the domestic market is strongly influenced by international conditions. As highlighted, the palm oil season in Southeast asia has been weak due to heavy rains, leading to a decrease in production and an increase in prices. Moreover,the global demand for soybean oil has surged,further tightening supply.
TNE: So, how do global market conditions reflect on our local prices?
AM: India imports approximately 58% of its edible oil requirements. As international prices increase—like the 7.5% rise in the FAO Vegetable Oil Price Index in November compared to october—these costs ultimately trickle down to consumers in India. This correlation between global supply chains and local pricing is crucial to understand.
TNE: With the upcoming harvest season, were there any signs of price relief that didn’t pan out?
AM: That’s correct. When new crops of soybean and groundnut entered the market in October, many anticipated a price decrease. However, due to sustained tight supplies—especially of palm oil and high global demand—the expected relief did not happen. This situation has made it challenging for consumers as they face higher costs at the retail level.
TNE: Speaking of retail prices, could you elaborate on the current prices consumers are facing?
AM: at present, soybean oil prices are hovering between Rs 160-170 per liter, with palm oil witnessing a staggering 37% jump in October alone. Mustard oil, sunflower oil, and groundnut oil also saw significant price increases.The consumer is feeling the impact of these price changes, notably during festive times when edible oils see a spike in usage.
TNE: What strategies can consumers adopt to cope with rising edible oil prices?
AM: I reccommend consumers keep an eye on market trends and consider diversifying the types of oils they use. Trying to purchase oils in bulk during sales can also help, as can opting for locally produced oilseeds when possible.Understanding seasonal demand and pricing can aid in making informed purchases. Additionally, being aware of government announcements regarding import duties can definitely help consumers anticipate price changes.
TNE: What does the future hold? Are there any signs that edible oil prices might stabilize anytime soon?
AM: That’s tough to predict. The government’s ongoing efforts to promote local oilseed cultivation are crucial for long-term stability. However, we are still at the mercy of global conditions, including climate factors in producing regions. If international supply levels improve and domestic production rises, we might see some stabilization, but it will take time.
TNE: thank you, Dr. Mehta,for your insights on this pressing issue. Your expertise sheds light on the complexities of the edible oil market that many consumers face today.
AM: Thank you for having me. It’s essential for both consumers and policymakers to understand these dynamics as we navigate the ongoing challenges in the edible oil sector.