edible oil. Edible oil prices down by ₹8-10 a kg in one month, further reduction likely: Solvent Extractors

The decision of the Solvent Extractors’ Association of India (SEA) to reduce the prices of edible oils during the Diwali festival has helped bring down prices by ₹8-10 a kg, according to SEA President Atul Chaturvedi. He has hinted at a further reduction in the coming days.

In a statement, he said the SEA had advised its members before Diwali to reduce prices to the maximum extent possible. The last few months have been a harrowing time for domestic consumers on account of the high international prices of edible oils such as palm, soya and sunflower.

He said the Centre had also reduced import duties on edible oils to provide relief to the consumer.

“We are happy to confirm all these actions have resulted in edible oil prices coming down by around ₹8 to ₹10 per kg in the last 30 days,” he said.

Giving comparative figures of domestic wholesale prices of some edible oils on October 14 and on December 3 in Mumbai, he said the price of groundnut oil came down from ₹1,450 per 10 kg unit to ₹1,350; cotton oil (washed) prices eased to ₹1,165 from ₹1,380 per 10 kg unit; sunflower oil prices came down to ₹1,180 from ₹1,330 per 10 kg unit; and rapeseed oil prices cooled to ₹1,640 from ₹1,720 per 10 kg unit.

During the above-mentioned period, the prices of refined soyabean oil cooled to ₹1,230 from ₹1,280 per 10 kg unit, and RBD palmolein to ₹1,180 from ₹1,220 per 10 kg unit.

Prices to remain in check

He hoped that a large soya crop of around 120 lakh tonnes (lt) and a groundnut crop of around 80 lt would keep prices in check. High prices for mustard seed had elicited a massive supply-side response from farmers, who had planted the crop on a record 77.62 lakh hectares. This is higher by almost 30 per cent, and has the potential to increase domestic mustard oil availability by 8 to 10 lt in the coming year, he said.

Prices to cool globally

On the global edible oil scenario, Chaturvedi said the trend is relatively bearish and prices would continue to move downward. This is amply demonstrated by lower quotations for forward months for palm and soya oil, he said.

International C&F prices of some imported edible oils also witnessed a decline during the period between October 14 and December 3. The C&F prices of RBD palmolein came down from $1,340 a tonne on October 14 to $1,325 on December 3; crude sunflower oil from $1,450 a tonne to $1,435, and crude soyabean oil from $1,440 a tonne to $1,429.

However, the C&F price of crude palm oil went up from $1,350 a tonne to $1,375 during the period.

However, one factor that is mildly bullish is the weakness of the rupee, which increases the import cost, he said.

With the likelihood of lower import parities, SEA members have agreed to pass on the reduced cost to their consumers . “We feel our members would reduce the price by around ₹3 to ₹4 per kg in the foreseeable future by our members. This should provide relief to our edible oil consumers during the festive season,” he added.

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