No Respite from Surging Edible Oil Prices till October- November
Edible oil prices are expected to remain high till the new crop arrives in October – November.
Edible oil prices are expected to remain high till the new crop arrives in October – November. Popularly used oils in Indian households like Mustard oil, Groundnut oil and Palm oil have seen a sharp rise in prices in the last six months despite of the efforts made by the government to ease the pressure on the pocket of the common man.
Edible oil: Global Market Scenario
B.V. Mehta, Executive Director, Solvent Extractors Association of India said the rates of the edible oils are unlikely to come down anytime soon as India meets more than half of the domestic demands through imports and the prices of edible oils in international market have surged sharply due to various factors. The soybean oil prices in the market are high, this has impacted the prices of palm oil since edible oil is a highly substitutable product and such price volatility pushes consumers to cheaper alternatives.
The corona pandemic has affected labor in Malaysia and there has been larger consumption of soybean oil in making of biodiesel.
Of the 250 million tonnes of soybean meal oil available globally, around 50 million tonne have been diverted towards biodiesel leading to reduced availability of edible oil in the market putting pressure on the overall sentiment.
Edible Oil: Indian Market Scenario
Average prices of edible oils in India have increased by up to 52% in July compared to the previous year. Ashwini Kumar, Minister of State food and consumer Affairs told Rajya Sabha that the government has taken several measures to curb the increase in prices of essential food items like Pulses and edible oils in the wake of the COVID 19 Pandemic.
To control the rising prices of crude palm oil, the import duty has been cut by 5% from 30 June, 2021 until 30 September, 2021. This step has brought down the effective tax rate on Crude Palm Oil to 30.25% which earlier was 35.75%. Further, the duty on Refined Palm oil has been reduced to 37.5%.
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