Despite high international prices, the government interventions aided by increased oil seeds production has helped bring down edible oil prices in recent months, the Food Secretary said on Thursday.
“When you are dependent almost 60 per cent on the import component, then the domestic prices are dependent on the international prices. What the government of India did was to reduce duty to almost zero in case of edible oils, which showed significant reduction in the prices across brands of oil,” Secretary, Food, Sudhanshu Pandey told a press conference.
This, Pandey said, was the second reduction in recent time. Prior to it, a similar 8-10 per cent reduction had happened.
Explaining the reasons, he said: “For the first time in the history of edible oils, the international prices of palm oil, soya bean oil and sunflower oil, are nearly in the range of USD 1300 per tonnes. This has never happened. There used to be an almost 300-400 USD gap between the prices of palm oil and other soybean and sunflower oils.”
Giving an overview of the international situation, he said, in Malaysia, the production came down from about 208 to 179 lakh metric tonnes (LMT); in Indonesia, about 20 per cent diversion happened during the Covid period towards the bio-fuel policy of 30 per cent blending; in Ukraine, there was a failure of the sunflower crop and in Argentina, there was drought situation, which led to reduction in soybean prices.
“So, all these climatic and agricultural conditions led to low availability of oil in the international market and higher prices,” he said, adding: “Our domestic production has gone up this year. Mustard oil sowing is 32 per cent more than last year. And therefore, we can expect higher crop output from mustard. That surely will have a softening effect on the prices.”
Earlier in October, the Food Secretary had dashed off a letter to several states mentioning that the respective state governments had to ensure that full benefit of duty reduction made by the Centre is passed on to the consumers in order to provide immediate relief from the prevailing high prices of edible oils, especially during the ensuing festival season.
“This would also help in bringing down the food inflation and provide relief to ordinary consumers by reducing the prices of edible oils by Rs 15-20 per kg (approx),” the government had said then.
On Thursday, Pandey, during a media interaction, made a presentation where he showed how prices of different edible oil brands have come down after December 24. Ruchi Soya Industries has reduced retail prices on various oils by Rs 15-30 per litre, Rs 30 for soybean while for kachi Ghani mustard oil, it is less by Rs 20. Adani Wilmar’s Fortune Soya oil price came down to Rs 155 per litre and Bunge India’s oil prices came down by Rs 15-20 per litre.