Following a $100 per tonne drop in the international prices of soybean, sunflower, and palm oil in the past two weeks, consumers can expect relief as edible oil prices are expected to drop by up to 9% after a four-month lag from mid-December.

Drop in Edible Oil Pricing

Prices for soybean oil have decreased as a result of the abundant soybean production globally. Sunflower oil prices are also declining, while palm oil prices have fallen because Indonesia, the world's largest palm oil producer, has yet to establish a biodiesel policy.

Sandeep Bajoria, CEO of Sunvin Group, an oil trading company, stated that prices of sunflower oil have dropped from $1,300 per tonne to $1,200 per tonne over the past two weeks, while prices of soybean oil have dropped from $1,230 per tonne to $1,130 per tonne. The price of palm oil in transit has also decreased, from $1,320 per tonne to $1,220 tonne.

“Even in the wholesale market, mustard oil prices have dropped by Rs 10 per litre, to Rs 136. At the retail level, mustard oil prices will also fall. By mid-December, edible oil prices should have dropped by 8 to 9%”, Bajoria stated.

To meet domestic demand, India imports between 14.5 and 15 million tonnes of edible oils annually.

Priyam Patel, managing director of NK Proteins, which manufactures edible oils under the Tirupati brand name, says, “Global soybean supplies remain abundant, with South America expected to deliver a record crop, which could put downward pressure on soybean oil prices.”

However, Patel stated that the drop in sunflower oil prices may be temporary.

"Russia's decision to raise the export duty on sunflower oil is expected to take effect sometime in December, according to reports. An unprecedented increase of 183% in global export duty is currently projected. This move is likely to have an impact on global sunflower oil consumers," he said, adding that any move by Moscow to increase export duties could cause sunflower oil prices to rise by Rs 40-50 per 10 kg, increasing the financial burden on Indian consumers.

REFERENCE- economictimes.indiatimes.com