Cites sharp fall in global prices & robust domestic oilseed production
The food ministry has asked retailers of edible oil to reduce prices, citing the sharp fall in global prices of palm, soyabean and sunflower oils and bumper production of domestic oilseeds, such as mustard, groundnut and soyabean this season.
“While most of the brands have reduced prices in the past, still the prevailing maximum retail prices (MRP) of the packed edible oil in the market is not in line with the current prices as in the international market,” according to a food ministry communication.
While urging members of the Solvent Extractors Association (SEA) to reduce MRP of edible oil and pass on the benefits to consumers, the ministry has stated “the prices of edible oil in the domestic market seem to be on a high, considering the prevailing market scenario”.
According to department of consumer affairs data, retail prices of edible oils such as groundnut and palm oil on Tuesday remained unchanged at Rs 185/litre and Rs 105/litre, respectively during the last three months. Retail prices of mustard oil declined by around 9% to Rs 150/litre on Tuesday from prices prevailing three months back.
The landed prices of palm oil (at Mumbai port), which has close to 60% share in the country’s import basket, declined by 44% to $1,000/tonne on April 28 this year, against the $1,791/tonne that prevailed a year ago.
Landed prices of crude soy and sunflower oil have declined by 50% and 55% to $960/tonne and $990/tone, respectively.
India imports about 56% of its annual edible oil consumption of 24-25 MT. About 8 MT of palm oil is imported from Indonesia and Malaysia annually.
The share of domestic edible oil includes mustard (40%), soyabean (24%) and groundnut (7%) and others.
The edible oil imports rose by 23.7% to 6.98 million tonne (MT) during the November- March period (2022-23), compared to the same period last year, according to SEA data.
The retail inflation in oil and fats categories declined by 7.86% in March, 2023 year-on-year. For mustard oil, prices declined by 14.65% last month. Inflation in refined oil (sunflower, soybean and palm) also declined by 10.93% in March, 2023.
Meanwhile, Ajay Jhunjhunwala, president, SEA, stated in a communication to the food ministry that unbridled imports of palmolein is resulting in collapse of edible oil prices, which is impacting the marketing of mustard during peak harvest time and causing distress to farmers.
At present, crude palm, soyabean and sunflower oil imports attract only a 5% agri infra cess and a 10% education cess, meaning a total tax incidence of 5.5%.
“The steep fall in edible oil prices has resulted in a fall in oilseed prices and the farmers are disappointed and discouraged by this policy of keeping duties very low, even after the world prices of edible oil have crashed,” Davish Jain, chairman, Soybean Processors Association of India (SOPA), has stated in a communication to commerce ministry.
Source:financialexpress.com