Prices of branded palm oil, sunflower and soybean oil have been reduced by up to Rs 15 per litre as international prices have softened. Palm oil has seen a fall of Rs 7-8 per litre in prices, and sunflower oil rates have dropped by Rs 10-15 per litre. Soybean oil prices have fallen Rs 5 per litre, according to a media report.
“The drop in prices has prompted distributors to stock up as demand is expected to pick up. The fall in edible oil prices will also have an impact on food inflation, a major part of which comes from edible oils. The edible oil and fat category saw 13.26 per cent inflation in May, mostly contributed by the surge in domestic prices of edible oil in the past one year,” according to the ET report quoting Sudhakar Rao Desai, president of Indian Vegetable oil Producers Association.
It said Gemini Edibles & Fats, a Hyderabad-based company, has cut the maximum retail prices (MRP) of its Freedom Sunflower Oil by Rs 15 to Rs 220 for a one-litre pouch in the past week. The company will reduce it by Rs 20 more this week to Rs 200 per litre.
Meanwhile, India’s palm oil imports fell 10 per cent in May as compared to April as top producer Indonesia curbed exports of the edible oil. The Solvent Extractors’ Association (SEA) said India imported 5,14,022 tonnes of palm oil in May, down from 5,72,508 tonnes in April.
India is the largest importer of palm oil in the world and is dependent on Indonesia and Malaysia for its demand. India imports over 13.5 million tonnes of edible oil every year, out of which, 8-8.5 million tonnes (around 63 per cent) is palm oil. Now, nearly 45 per cent comes from Indonesia and the remaining from neighbouring Malaysia. India imports roughly 4 million tonnes of palm oil from Indonesia each year.
Indonesia in April had banned the palm oil exports. The export ban was not applicable to crude palm oil but will only cover refined, bleached, deodorised (RBD) palm olein. After almost a month of announcing the ban, the country lifted the restriction May 23.
As the supply got halted after the ban, the prices of edible oil in India increased, which led to the price hike pressure on various products. Palm oil and its derivatives are used in food products, detergents, cosmetics and biofuels. These are used to manufacture several daily consumption goods such as soaps, margarine, shampoos, noodles, biscuits and chocolates. So, any rise in palm oil prices will push up the input costs across these industries.
India Ratings had also said the ban by Indonesia was a short-term measure to bring immediate relief from the high prices and supply issues in Indonesia, and a complete ban on the export of palm oil could be difficult to sustain as the country’s domestic consumption is around 17 mnt, less than 40 per cent of its annual production of close to 45 mnt.