After a meeting with the food and consumer affairs ministry on Thursday, edible oil processors and manufacturers have agreed to cut prices by ₹10-12 to pass on benefits of a decline in global prices to consumers, officials familiar with the matter said.
“Cooking oil manufacturers have agreed to further slash edible oil prices by ₹10-12 in view of softening global prices. We had a good meeting with them where we made a detailed presentation with data,” said one of the officials, asking not to be named.
Although manufacturers have cut prices, the ministry is of the view that there is further scope to reduce rates owing to a downward correction in global prices, the official added, asking not to be named.
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India imports up to two-thirds of its cooking oil and prices had spiralled in recent months owing to the Russia-Ukraine conflict and a brief ban on export of palm oil by Indonesia, a large exporter.
Over the past two months, international prices have come down since Indonesia removed its ban on exports, moderating prices.
{{/usCountry}}Over the past two months, international prices have come down since Indonesia removed its ban on exports, moderating prices.
{{/usCountry}}The Centre has held three meetings since May with manufacturers to review prices and availability. On July 6, the government had held a similar review and asked edible oil firms to slash retail prices after a meeting with manufacturers, citing falling global prices.
India depends on Indonesia and Malaysia for palm oil imports, and on Ukraine, Argentina, Brazil and Russia for most of its sunflower oil and soyabean oil demand. India’s annual import of edible oil stands at nearly 13 million tonnes.
In July, the government indicated that the maximum retail price (MRP) of most imported cooking oils should go down in tandem with declining import prices by up to ₹10 per litre within a week.
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“Edible oil companies should pass on the benefits of easing global prices to consumers and there is scope for this,” the official mentioned above said.
The landed prices of palm oil have fallen by over 14% to $1,170 per tonne on July 29 from a month ago, according to market data. Similarly, soybean and sunflower oil prices have declined between 4-14% to $1,460/tonne and $1,550/tonne.
Cooking oil makers have slashed prices on the back of lower global prices and reduced import duties since prices spiraled to multi-year highs in May. Adani Wilmar Ltd., the country’s largest edible oil producer, had cut prices of its products under the ‘Fortune’ brand by ₹10.
To soften prices and ease the burden on consumers, the Centre has allowed duty-free import of 20 lakh metric tonnes each of crude sunflower and soybean oil per year till 2024. The government has also reduced the import prices of crude palm oil and soybean oil.