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Retail edible oil prices on decline after Govt reduced import duties

Edible Oil Prices on decline-center

The Union government said on Friday that retail edible oil prices are on the decline after it reduced import duties to minimize the impact of rising international commodity prices.

According to data shared by the Department of Food and Public Distribution, prices of groundnut oil, soya oil, palm oil, and sunflower oil — which account for 89% of domestic household consumption — have dropped by ₹5-20 per kg in various regions between October 31 and November 3.  As per the report, branded edible oil players have also revised their maximum retail price (MRP) to pass on the savings to consumers.

Also Read: Edible oils imports dropped by 27% in Feb 2021 due to excessive imports and higher prices

Prices are falling

Food Secretary Sudhanshu Pandey told reporters on Friday, ‘The Union government has been working on a number of steps to make sure that consumers get relief. We are pleased to see the declining trend across the country, and data from 167 centers shows that edible oil prices have dropped significantly, ranging from ₹5 to ₹20 per kg. Sunflower oil, Groundnut oil, Palm oil, and Soya oil have all shown a downward trend.’

Retail palm oil prices, for example, fell by ₹6 per kg in Delhi, ₹18 in Aligarh, ₹10 in Jowai (Meghalaya), ₹5 in Dindigul, and ₹7 in Cuddalore (both Tamil Nadu).

According to Ministry data, retail prices of Soyabean oil fell by ₹5-11, Groundnut oil fell by ₹5-10/kg, and Sunflower oil fell by ₹5-20 between October 31 and November 3.

Mustard may suffer as a result

According to Pandey, the government’s recent actions are expected to have an impact on mustard oil prices as well, which accounts for about 11% of domestic consumption. He stated that mustard sowing is currently underway and that there has been a significant increase this year, with the area sown being 12-15% higher than last year.

The decision of manufacturers under the Solvent Extractors Association and the Indian Vegetable Oil Producers Association to cut wholesale prices is one of the reasons for the drop in edible oil prices. Prices for major edible oil players like Adani Wilmar, Patanjali, Gemini, and Ruchi Industries have increased by ₹4-7 per liter.

‘Other players who have reduced wholesale prices of edible oils are Modi Naturals, Delhi, Gokul Re-foils and Solvent, Vijay Solvex, Gokul Agro-Resources, and NK Proteins,’ according to a statement from the Food Ministry.

Stock limitations

As of now, Uttar Pradesh has imposed stock limits on retailers and wholesalers in accordance with the Centre’s directive. According to Pandey, three more states are well on their way to imposing stock limits. ‘We will review the stock limit status with the state governments next week,’ he added.

To keep edible oil prices under control, the government has reduced import duties on palm oil, sunflower oil, and soyabean oil, suspended futures trading in mustard oil on the National Commodity and Derivatives Exchange NCDEX, and directed states to impose stock limits.

Also Read: To halt the rise in edible oil prices, Centre reduced import duties on Oils

The basic duty on crude palm oil, crude soyabean oil, and crude sunflower oil was previously reduced from 2.5% to nil. The agricultural process has been reduced from 20% to 7.5% for Crude Palm Oil and 5% for Crude Soyabean Oil and Crude Sunflower Oil.

The basic duty on RBD (Refined, Bleached and Dried) Refined Soyabean Oil, Palmolein Oil, and Refined Sunflower Oil has been reduced from 32.5% to 17.5%.