The food ministry has called a meeting of edible oil manufacturers and trade bodies on Thursday to discuss the possibility of a further reduction in the retail prices of cooking oil amid a fall in global prices of these commodities in the last one month.
This will be the third such meetings since May. Global edible oil prices have witnessed a decline especially after Indonesia, the biggest exporter of palm oil, removed ban on shipment and easing of supply of sunflower and soy oils.
Food ministry sources told FE that the industry has to pass on the benefits to consumers. “There is still scope of further reduction in retail prices of edible oil,” an official said.
India meets 56% of its annual edible oil consumption via imports.
According to trade data, landed prices of palm oil, which has a share of more than 56% in India’s import basket, fell by more than 14% to $1,170 a tonne on July 29, from the level a month ago.
Similarly, soybean 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.
The edible oil industry had then informed that the global prices of different edible oils have fallen by $ 300-450 per tones in the last one month, but it takes time to reflect in the retail markets. Leading manufacturers including Adani Wilmar had reduced various varieties of edible oil by Rs 5 – Rs 30 per litre subsequently.
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.
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 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.
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.