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Explainer: Factors that will make edible oil cheaper in India

Google Oneindia News

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.

Explainer: Factors that will make edible oil cheaper in India

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.

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