The food ministry on Thursday urged the edible oil retailers to pass on the benefits of the downward trend in global edible oil prices to consumers.
“With the edible oil prices beginning to show a downward trend and set to witness further reduction to be made by the edible oil industry, the Indian consumers can expect to pay less for their edible oils,” according to an official statement.
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The ministry has suggested that whenever a reduction in price to distributors is made by the manufactures or refiners, the benefit should be passed on to the consumers by the industry. “Some companies which have not reduced their prices and their maximum retail prices (MRP) is higher than other brands have also been advised to reduce their prices,” according to the statement.
Food secretary Sanjeev Chopra held a meeting with representatives of Solvent Extraction Association of India (SEAI) and Indian Vegetable Oil Producers’ Association.
Edible oil processors informed the government that the global prices of various edible oils have fallen by $200-250/tonne in the last two months, “but it takes time to reflect in the retail markets and the retail prices are expected to come down shortly”. Mother Dairy on Wednesday announced a cut in the MRP of Dhara brand of edible oil by Rs 15-20/litre across variants with immediate effect.
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 soya and sunflower oil have declined by 50% and 55% to $960/tonne and $990/tonne, respectively.
India imports about 56% of its annual edible oil consumption of 24-25 million tonne (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.
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According to department of consumer affairs data, retail prices of edible oils such as groundnut and palm oil on Thursday 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 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.
At present, crude palm, soybean 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 edible oil imports rose by 23.7% to 6.98 MT during the November- March period (2022-23), compared to the same period last year, according to SEAI data.