Explainer: Factors that will make edible oil cheaper in India
New Delhi, May 24: Indian consumers are expected to get some relief as the prices of edible oil are likely to come down. The rates of essential cooking oil had increased due to high inflation.
The Russia-Ukraine crisis along with export curbs in major edible oil-producing countries like Indonesia pushed up prices for Indian consumers since February 2022. As India imports, almost 55-60 per cent of its annual edible oil consumption due to low domestic oilseeds production, consumers bore the brunt of high international rates. However, the prices are now expected to fall.
Here, we are listing out the factors which will make edible oil cheaper in India:
Factor
1:
Indonesia,
the
world's
biggest
supplier
of
palm
oil,
has
lifted
a
ban
on
exports
which
is
going
to
help
India
and
other
importers.
It
had
imposed
the
ban
on
April
28
and
it
was
one
of
the
biggest
acts
of
crop
protectionism
since
Russia's
invasion
of
Ukraine
in
February
and
it
stymied
exports
of
sunflower
oil
and
worsened
a
global
shortage.
India annually imports around 13-13.5 million tonnes of edible oils, of which around 8-8.5 million tonnes (around 63 per cent) is palm oil. Of this, 8-8.5 million tonnes of palm oil, 45-50 per cent comes from Indonesia and the rest from neighbouring Malaysia.
As Indonesia has lifted the ban, the rates of cooking oil are expected to drop in India and other countries.
Factor
2:
In
a
big
move,
the
Centre
reduced
the
excise
duty
on
petrol
and
diesel.
The
Centre
on
Saturday
announced
that
it
was
cutting
excise
duty
on
petrol
by
Rs
8
and
diesel
by
Rs
6
per
litre.
This
development
will
reduce
the
inflation
by
20
basis
points
and
help
cool
the
inflation
trajectory,
say
experts.
Also,
the
price
of
essential
commodities
including
edible
oil
is
expected
to
come
down
in
the
days
to
come
due
to
this
factor.
Factor
3:
The
drop
in
the
price
of
oil-oilseeds
will
make
cooking
oil
cheaper
in
the
country.
The
price
of
mustard
seeds
dropped
by
Rs
100
per
quintal
this
week,
as
per
a
report
on
Businessworld.
The
rates
of
mustard
Dadri
oil,
mustard
Pakki
Ghani
and
Kachi
Ghani
oil
have
witnessed
a
decline.
The prices of soybean grains and soybean loose have also dropped despite the rise in overseas markets.
Factor
4:
On
the
other
hand,
the
Centre
is
reportedly
planning
for
a
cut
in
customs
duty
for
essential
items
such
as
edible
oil
and
other
imported
raw
materials
for
industries.
"The
target
is
to
reduce
inflation
by
60-70
basis
points
(in
short
to
medium
term)
and
there
can
be
another
round
of
duty
cuts,"
a
senior
official
told
the
business
daily.
All these factors are going to reduce the price of cooking oil in the country.