By Kritika Arora
Edible oil manufacturers, including Adani Wilmar, Emami Agrotech and Ruchi Soya, on Thursday “in principle agreed to cut prices further” in a meeting with the food ministry officials here, sources said. Landed prices of these items have seen steady decline in recent weeks.
Since May, the global price of palm oil has been declining after Indonesia, the biggest exporter of the item, removed a ban on shipment.
“There is still scope of Rs 8-10 per litre reduction in retail prices of edible oils,” an official said.
Trade sources said that the prices of various varieties of cooking oil have already been slashed by Rs 30-40 a litre and benefits of softening of global prices would be passed on to consumers gradually.
“Correcting the prices is a continuous affair and whenever the international prices come down, we pass that benefit to the consumers,” Krishna Nyayapati, director at Emami Agrotech, told FE after the meeting.
“We had taken two rounds of price reduction by Rs 15-30 in the last two months.
“As of now, prices are stable and they have come down from the peak,” Angshu Mallick, managing director, Adani Wilmar, said.
According to data by the Solvent Extractors Association of India, landed prices of palm oil, which has a share of more than 56% in India’s import basket, fell by more than 14% to $1,080 a tonne on July 29, from the level a month ago.
Similarly, soyabean and sunflower oil prices have declined by 4% and 14%, respectively, to $1,460/tonne and $1,550/tonne, respectively, in the last one month. These two have a combined share of 43% in India’s edible oil import bill.
Last month, the department of food and public distribution, in a meeting with edible oil makers and trade associations, had asked companies to reduce prices by at least Rs 15 a litre in view of a softening of global prices.
“We have reduced our refined oil prices by an average Rs 20 per litre.
“Right now we do not see further scope of price reduction,” Akshay Modi, managing director, Modi Naturals, said.
In May, the ministry had convened the first meeting of leading edible oil makers and trade bodies and subsequently many companies announced reduction in retail prices of edible oil.
India meets 56% of its annual edible oil consumption via imports. The country’s annual imports are around 13-14 million tonne (MT). Around 8 MT of palm oil is imported from Indonesia and Malaysia, while other oils, such as soya and sunflower, come from Argentina, Brazil, Ukraine and Russia.
According to data from the department of consumer affairs, modal retail prices of edible oils — mustard, soya, sunflower and palm oil — have declined in the range of 5-12% in the domestic market since June 1.“Indian consumers can expect to pay less for their edible oil and falling prices will help in cooling the inflation as well,” a food ministry statement had stated last month.
The cooling of global prices which rose sharply in May 2022 when Indonesia, the world’s biggest exporter of palm oil, had imposed a ban on shipment. The supply of sunflower oil from Ukraine was disrupted because of its conflict with Russia.
(With inputs from Shubhra Tandon)