Year-ender. Vegoil sector witnessed a pronounced consumer-centric trend: IVPA chief

In 2023, the vegetable oil sector witnessed a pronounced consumer-centric trend, marked by a substantial 35-40 per cent drop in prices across various oils. This decline was attributed to the global abundance of palm and sunflower oils. For the industry, the year unfolded unfavourably, characterised by heightened volatility and a persistent downward price trajectory.

The vegetable oil market in 2023 experienced the stabilising influence of palm and sunflower oil, acting as a price anchor on the global stage. Within India, mustard crops fell below the MSP, but strategic government intervention, involving the purchase and stockpiling of 1.5 million tonnes, successfully elevated prices beyond the MSP threshold. Robust domestic meal supply and demand dynamics obviated the need for soya meal imports compared to the previous year.

Presently, global prices have reached a consolidation point, sufficiently low to stimulate heightened demand over the next 5-6 months. Anticipating a shift, prices are poised to rise by approximately 10-15 per cent by March-April 2024, as the pressure on palm stock and production subsides which will in turn help the mustard seed prices during the harvest of the next season.

Our recommendations persist along three key avenues such as proposing the implementation of a dynamic duty slab system, wherein duties automatically adjust in response to global volatility. We are advocating for governmental intervention to widen the duty differential between finished goods imports of palm and crude palm. The current diminished differential has led to an oversupply of refined olein, adversely affecting the domestic industry.