NEW DELHI: During the current festive season, prices of edible oils have increased significantly. Palm oil prices have risen by 37% over the past month, impacting household budgets and increasing costs for restaurants, hotels, and sweet shops that use the oil for preparing snacks, TOI reported.
Mustard oil, a commonly used oil in households, has seen a 29% price increase in the same period.
This rise in oil prices comes as retail inflation reached a nine-month high of 5.5% in September, driven by high vegetable and food prices. This development has reduced the chances of the Reserve Bank of India cutting interest rates for now.
The government increased import duties on crude soybean, palm, and sunflower oils last month, contributing to the price rise. Import duties on crude palm, soybean, and sunflower oils were raised to 27.5% from 5.5%, and on refined edible oil to 35.7% from 13.7%, effective from September 14.
These oils make up a large part of India's edible oil imports.
Officials have reported that global prices for crude palm, soybean, and sunflower oils have risen by approximately 10.6%, 16.8%, and 12.3% respectively in the past month. India imports around 58% of its edible oil demand and is the second-largest consumer and the biggest importer of vegetable oils.
Consumers are likely to face higher prices for the next few months as reducing import duties seems unlikely. The government previously said, “These adjustments are part of the govt’s ongoing efforts to bolster domestic oilseed farmers, especially with the new soybean and groundnut crops expected to arrive in markets from October 2024.”
Industry sources agree that maintaining the current import duty regime is necessary to ensure farmers receive good prices for oilseeds.
"If we want to make ourselves self-sufficient in edible oil, we have to encourage farmers to bring more areas under oilseeds. That will happen only when farmers get good prices for years and we don’t go for excess import of oil," TOI quoted B V Mehta, executive director of the Solvent Extractors' Association (SEA) as saying.
The unexpected rise in global prices of key edible oils has affected the prices of all cooking oils. The government had considered several factors, including increased global production and higher global ending stocks, when raising duties.
(With TOI inputs)
Mustard oil, a commonly used oil in households, has seen a 29% price increase in the same period.
This rise in oil prices comes as retail inflation reached a nine-month high of 5.5% in September, driven by high vegetable and food prices. This development has reduced the chances of the Reserve Bank of India cutting interest rates for now.
The government increased import duties on crude soybean, palm, and sunflower oils last month, contributing to the price rise. Import duties on crude palm, soybean, and sunflower oils were raised to 27.5% from 5.5%, and on refined edible oil to 35.7% from 13.7%, effective from September 14.
These oils make up a large part of India's edible oil imports.
Officials have reported that global prices for crude palm, soybean, and sunflower oils have risen by approximately 10.6%, 16.8%, and 12.3% respectively in the past month. India imports around 58% of its edible oil demand and is the second-largest consumer and the biggest importer of vegetable oils.
Consumers are likely to face higher prices for the next few months as reducing import duties seems unlikely. The government previously said, “These adjustments are part of the govt’s ongoing efforts to bolster domestic oilseed farmers, especially with the new soybean and groundnut crops expected to arrive in markets from October 2024.”
Industry sources agree that maintaining the current import duty regime is necessary to ensure farmers receive good prices for oilseeds.
"If we want to make ourselves self-sufficient in edible oil, we have to encourage farmers to bring more areas under oilseeds. That will happen only when farmers get good prices for years and we don’t go for excess import of oil," TOI quoted B V Mehta, executive director of the Solvent Extractors' Association (SEA) as saying.
The unexpected rise in global prices of key edible oils has affected the prices of all cooking oils. The government had considered several factors, including increased global production and higher global ending stocks, when raising duties.
(With TOI inputs)
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