Cooking Oil Prices: Govt Asks Companies To Slash Cooking Oil Prices Amidst Decline In Global Rates

The Indian government has asked cooking oil firms to slash prices of their products in line with the decline in international rates, ET reported citing an association of solvent extractors. As per the report, manufacturers have however said that an immediate reduction may not be possible.

Industry executives stated that a reduction in retail prices may not be possible till March when the mustard crop harvest starts. It is worth mentioning that India is the world's largest importer of vegetable oil. The basic import duty on refined soyabean oil and sunflower oil was slashed to 12.5% from 17.5%, in June last year. India imports palm oil mainly from Indonesia and Malaysia, and a small quantity of of crude soft oil, including soybean from Argentina. The country imports Sunflower oil from Ukraine and Russia.

"The ministry of consumer affair has expressed that the MRP on oils like soyabean, sunflower and palm oil have not been reduced to the extent of decrease in international prices," said Ajay Jhunjhunwala, president of Solvent Extractors' Association of India, in a letter addressed to association members on Tuesday.

However, industry executives said there is minor scope for an immediate reduction in prices. "Cooking oil prices have been very stable. There was no steep increase or decrease in prices. Our MRP is corrected every month in line with the prevailing price trends. We do not foresee immediate correction in prices," said Angshu Mallick, CEO of Adani Wilmar, which sells cooking oil under the 'Fortune' brand. "However, we keep on watching the international commodity prices and will take action based on that."

Sandeep Bajoria, CEO of vegetable oil brokerage Sunvin Group, said, "Prices had declined by about 10% in December and have again increased by 8% in January."

Executives said most companies would be able to cut prices by only 3-4%.

Earlier this year, the Indian government extended lower import duty on edible oil by almost a year, till March 2025. The lower import duty structure on crude palm oil, crude sunflower oil, and crude soy oil was originally set to expire in March, this year. India also levied a 50% duty on exports of molasses, a by-product of sugarcane used as raw material for alcohol production, with effect from January 18.

According to industry data, India's edible oil imports dipped 16% on an annual basis in December to 13.07 lakh tonnes due to decreased shipments of crude and refined palm oils.