Representatives of India’s edible oil industry met Commerce and Food Minister Piyush Goyal on Friday to discuss ways to check the galloping prices of the cooking medium as disruption of supplies of sunflower oil due to the on-going Russia-Ukraine conflict threatens to make the situation worse.
The meeting, called a day after the Union Food Secretary’s discussion with industry representatives on the matter, assumes significance as the government is wary of negative political fallouts of a further spike in cooking oil prices. No administrative measure, including recent imposition of stock limits, has been effective in the past one year to check prices, except for a few days of temporary relief in between immediately after import duties were reduced.
“India imports around 70 per cent of its sunflower oil from the Ukraine-Russia region and these supplies have come under a cloud due to the on-going war between the two countries. This is also having a spill over effect on global prices of palm oil as Ukraine accounts for more than half of global supply of sunflower and safflower oil as well,” a source tracking the matter told BusinessLine.
Volatile prices
According to data compiled by Consumer Affairs Ministry, pan-India average retail prices of groundnut oil, mustard oil, vanaspati, soyabean oil, sunflower oil and palm oil were between ₹137.3 and ₹191.88 per litre in February and were 10.8-31.7 per cent higher from the levels a year-ago.
However, in the case of soyabean oil and sunflower oil, prices in February were lower from the May-November 2021 period. Also, groundnut prices last month were down from the August-November 2021 period. For all other cooking oils, current prices are higher.
“The Minister wanted to know the industry’s alternative plan in case of prices of palm oil further increased,” sources said. He also had a detailed discussed with the industry representatives on the the demand-supply situation in the country.
India’s import of edible oils may be 12.96 million tonnes (mt) during 2021-22 (November to October), against 14.01 mt in 2020-21, according to Sudhakar Desai, President, Indian Vegetable Oil Producers’ Association (IVPA) President, who shared the figures at a virtual conference organised by UOB of Malaysia on Friday. Of this, import of palm oil is estimated at 7.63 mt (against 8.89 mt in the previous year) and sunflower oil at 1.50 mt (1.96 mt).
Among others, President of Solvent Extractors Association (SEA) Atul Chaturvedi and Desai were present in the meeting.
“The meeting was about finding ways to meet the shortfall caused by supply disruption in sunflower oil and also about diversion of palm oil towards biodiesel in producing countries. The representatives of the industry in the meeting are incidentally associated with companies who are big importers,” another source said.
The government is also debating whether there is a need for a further reduction in import duties of edible oil.