Edible oil prices, which have risen by 20 to nearly 50 percentage points in the last year, may not cool down “dramatically” but instead begin to decline from December, according to a top official with the Union’s Department of Consumers, Food and Public Distribution.
“Soybean oil and palm oil prices in the futures market for December are showing a slight downward trend, which means we cannot expect an increase,” said Sudhanshu Pandey, secretary of the Department of Food and Public Distribution.
“It may not cool down dramatically, but daam badhenge nahin; wo girenge hee (the price won’t go up, it will just go down), ”he added.
Pandey said: “In the coming days the soybean harvest will be harvested, then after four months the Rabi mustard harvest…. So hopefully prices should stay under control. ”The arrival of new crops and a bearish trend in the international market will help bring prices down, he said.
Pandey pointed out that India’s import dependency on edible oil is currently 60 percent: “When the international price is high, the effects are passed on. The silver lining is when you compare the international price increases for soybeans and palm olein, which last week was in the region of 22 percent and 18 percent, respectively. But the impact on the Indian market is less than 2 percent. “
He also highlighted factors such as tariff cuts and easements for ports, which he believes have helped control prices.
When asked whether the government plans to reduce the agricultural income levied on imports of raw palm oil to 17.50 percent in order to relieve the burden on consumers, Pandey said: “Agriculture is very important in order to support our own domestic production in the long term.” . This agriculture will fund the National Oilseed Mission. “
The officer said, “Whatever the government could do, it has done. It lowered import tariffs on both palm oil and others (oil). In this respect, the intervention was there and it is reflected. “
The average retail prices of six edible oils – peanut, mustard, vanaspati, soy, sunflower, and palm oils – have increased 21 to 48 percentage points over the past year, according to data from the Department of Consumer Affairs Portal on September 3, 2021. It shows that the average sales prices of various edible oils have also increased in the last month.
One of the reasons for this increase, according to Panday, is the rise in prices in the international market.
One factor that led to this “extremely important” rise in edible oil prices is over-buying by China, Pandey said. “You have inventory because [oilseed] Harvests in China have been damaged by drought and floods. “
In addition, says Pandey, “because of their international obligations, many countries are very aggressive in pursuing them – just as India makes ethanol from sugar cane and corn, they have a biofuel policy with their resources. Malaysia and Indonesia use palm oil for their biofuel policy. They are redirecting palm oil for biofuel. The US is also redirecting soybeans for biofuel…. These are the two largest oils in terms of share in the Indian market – palm oil has around 30-31% (market share) and soybean oil has around 22%…. So 50 percent of the consumption of edible oils in India comes from these two oils. “