After onion and tomatoes, edible oils could be the next big price driver of food inflation. February refined soya oil futures on the National Commodity and Derivatives Exchange (NCDEX) have moved up by almost 7% since November 10, peaking to Rs 638.35 per 10 kg on Monday.
Even mustard seed futures in the exchange have climbed by almost 3% since November and was at Rs 578.30 per 20 kg. ?The big factor in rising prices of imported edible oils has been firm global markets.
In Malaysia, palm production has suffered because of excessive rains, while Indonesia?from where India meets its 75-80% of its annual palm oil demand?has more than doubled its export duties in the last four months,? Badruddin, assistant vice-president, Angel Broking told FE.
He said reports of a good domestic mustard seed production would not have much of an impact on its prices as being a oilseed with high oil content, its prices move in tandem with global rates. ?In case the rise in mustard seed futures have been less pronounced than refined soya oil,? Badruddin added.
Indonesia, which is one of biggest producers of palm oil has raised its export duties from around 7% four months back to almost 15% in December. From January, the export duty has been fixed at around 20%.
In just one month, the landed price of crude palm oil, has risen from $1,115 per metric tonne, carriage and freight, Mumbai to around $1,260 per tonne. While, in India prices, the price crude palm oil has increased by 12.12% from Rs 49,500 per tonne in end November to almost Rs 55,500 per tonne on Tuesday. ?The price could move further in the coming months and will remain firm till March, which could make domestic edible oils costlier,? said BV Mehta, executive director of Solvent Extractors? Association of India (SEA).
He said, the unusual rise in export duties in Indonesia, is infact helping Malaysian processors as they can price their product at lower rates. For, India, though it does not make much of a difference as crude palm oil is largely imported from Indonesia and a small quantity of refined palm oil is done from Malaysia.
India?s vegetable (edible and non-edible oils) oil imports have climbed by almost 58% in the last three years, rising from 5.60 million tonnes in 2007-08 to around 8.82 million tonnes in 2009-10. Of this, more than 80% is palm oil and the rest is soyoil and other oils.