The post-pandemic world has given rise to a change in the edible oil consumption pattern. Home-cooked food has received prominence over those cooked in the hotels. One of the beneficiaries of this trend is mustard oil.
The average retail price of packed mustard oil went up by over 12 per cent during April-November, 2020 as against an increase of 3.89 per cent during the corresponding period of 2019.
According to the data available with the Department of Consumer Affairs, under the Union Ministry of Consumer Affairs, Food and Public Distribution, the average retail price of packed mustard oil was ₹117.95 a kg in April this year which went up to ₹132.66 a kg in November. With this, the average retail price went up by 12.47 per cent in eight months.
Vinod TP, Senior Analyst at Geojit Financial Services Ltd, told BusinessLine that the rise in prices is mainly factored by firm domestic demand for mustard oil, smaller rabi crop during 2019-20 and the ban on mixing other edible oils in mustard oil. Though the mustard seed and edible oils witnessed huge selloffs in the early months of 2020, prices regained thereafter as the government relaxed restrictions following the lockdown and procurement of produce by National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) amid lower supplies.
Consumption pattern
There was a significant change in patterns of food consumption during post-lockdown periods. Dining out was reduced considerably, and people started opting for home-cooked food by trying out new recipes. This led to a rise in demand for household edible oil packs such as soy oil, sunflower oil, and mustard oil, added Vinod.
Fall in production during 2019-20 and supply-side disruptions due to lockdown like delay in harvesting and selling of produce to markets also resulted in lower ending stocks, supporting mustard oil prices, he added.
Sudhakar Rao Desai, President of Indian Vegetable Oil Producers’ Association, told BusinessLine recently that mustard oil got a great boost during the past few months due to public perception that the same is good for immunity and also due to the partial shift of HoReCa (hotels, restaurants, and catering) demand to household demand.
Highest in a decade
Government datashows that the retail price trend of mustard oil for the last 10 years ( between April and November) went up by over 11 per cent in three years – 2011, 2015 and 2020. The price had seen a jump of 13.60 per cent during April-November of 2015, and 11.78 per cent in 2011.
Vinod added that said the monsoon was poor during 2011 and 2015. Lower soil moisture to grow rabi crops led to a decline in yield and output. Moreover, vegetable oil consumption was on the higher side which fuelled prices during these years, he said.