After a meeting with the food and consumer affairs ministry on Thursday, edible oil making companies have agreed to slash prices by Rs.10-12 to pass on benefits of a decline in global prices to users, officials familiar with the matter said.
“Cooking oil makers have agreed to further cut edible oil prices by Rs.10-12 considering softening global prices. We had a good meeting with them where we made a report presentation with information,” said one of the officials, asking not to be named.
Although makers have slashed prices, the ministry is considering that there is further scope to lower rates owing to a downward correction in global prices, the official added, asking not to be named.
India imports up to two-thirds of its cooking oil and prices had escalated in recent months owing to the Russia-Ukraine fight. And a short prohibition on export of palm oil by Indonesia, a large exporter.
Over the past two months, international prices have declined since Indonesia removed its prohibition on exports, moderating prices.
The Centre has held three meetings since May with makers to audit prices and availability. On July 6, the government had held a similar analysis and asked edible oil firms to cut retail prices after a meeting with manufacturers, citing falling global prices.
Import Of Edible oil
India depends on Indonesia and Malaysia for palm oil imports. And Ukraine, Argentina, Brazil and Russia for most of its sunflower oil and soybean oil demand. India’s annual import of edible oil reached nearly 13 million tonnes.
In July, the government specified that the maximum retail price (MRP) of most imported cooking oils should go down together with declining import prices by up to Rs.10 per litre within a week.
“Edible oil makers should pass on the benefits of softening global prices to users and there is scope for this,” the official mentioned above said.
The landed prices of palm oil have dropped by over 14% to $1,170 per tonne on July 29 from a month ago, according to a market report. Similarly, soybean and sunflower oil prices have decreased between 4-14% to $1,460/tonne and $1,550/tonne.
Cooking oil makers have cut prices on the back of lower global prices and lowered import duties since prices escalated to multi-year highs in May. Adani Wilmar Ltd., the country’s largest edible oil producer, had slashed prices of its products under the ‘Fortune’ brand by Rs.10.
To ease prices and soften the burden on consumers, the Centre has allowed duty-free import of 20 lakh metric tonnes each of crude sunflower and soybean oil per year till 2024. The government has also lowered the import prices of crude palm oil and soybean oil.
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