Retail edible oil prices in the country will start softening from December with arrival of new crops and a possible decline in global rates, Food Secretary Sudhanshu Pandey said. Retail prices of edible oils in India, which imports 60 per cent of its requirement, have shot up to 64 per cent in the past just one year, in line with the global developments.
“However, looking at the declining trend shown in prices of edible oils for December month in the futures market, it looks like retail prices will start declining. But, there won’t be any dramatic decline as there is still global pressure,” Pandey told reporters. The arrival of new crops and a likely drop in global prices should help in softening of edible oils’ retail prices in the country, he said.
Citing reasons for the sharp rise in domestic edible oils prices, the secretary said one major reason is that prices have gone up in the international markets as many countries are aggressively pursuing the biofuel policy using their own resources.
For instance, Malaysia and Indonesia, which are major suppliers of palm oil to India, are using palm oil for their biofuel policy. Likewise, the US is diverting soyabean for biofuel making, he said.
Moreover, palm oil and soyabean oil are the top-two oils in terms of share in the Indian market. Palm oil is about 30-31 per cent, soyabean oil is 22 per cent. “The country’s dependence on edible oils is 60 per cent. If the international price is high, its impact gets passed on,” he said. Pandey said the silver lining, however, was that the kind of price increase seen in the global market was not seen in the Indian edible oils segment due to the government interventions. While there was a 22 per cent increase in global prices of soyabean oil and 18 per cent in palm oil during last week, impact on the Indian market has been less than two per cent, he said.