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Oil consumption may fall 20% as prices touch Rs 150 a litre in retail
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Saturday, 15 May, 2021, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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Edible oil prices in India have risen sharply over the last four months, as industry insiders fear factors ranging from Covid-19 pandemic to speculative trading, delay in import clearances, supply chain disruptions and weather resulting in price rise.
India imports close to 70% of its edible oil, and industry insiders say that the oil consumption may witness a fall of around 20%, as the prices of all types of oil, sunflower, soybean, palm oil or mustard oil witnessed a sharp increase in recent times.
Even the government has ordered more import of soybean oil to arrest the price rise, as all the oils are selling above Rs 150 a litre in retail.
Apart from augmenting imports, Shankar Thakkar, president of the All India Edible Oil Traders Association, has suggested the government to ban the future trading of edible oil to arrest the price rise.
Thakkar also wants the government to look into delay in FSSAI clearance of imports. He said that all the ports of entries across India were witnessing delays in clearances of the consignments due to shortages of the FSSAI staff. He claimed that the working staff has been reduced to around 15% at ports of entries which is resulting in the delay in clearances, another cause for price rise.
Thakkar added, “Due to Covid pandemic, the supply chain has also got disturbed. The prices for freight have doubled, adding to the price rise.”
Another factor which has impacted the price rise was weather. Particularly in Southern America’s Brazil, the weather has played spoilsport for the soybean crop and impacted the production of soybean oil.
Further, India is importing only crude palm oil from the Southeast Asian countries and the refineries are scattered in India. Thakkar says that in Maharashtra there are only two refineries, so the demand can’t be met and due to Covid travel was restricted.
In the international market the prices of Palmolein oil were 1225 USD/MT, Soybean crude -1360USD/MT, and sunflower crude - 1620USD/MT as on May 7.
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