prices can drop further, after falling around Rs 2 a litre last month, if
remain low, said executives of edible oil companies.
“The inventory of edible oil at ports and at factories has gone up and domestic consumption is less. Hence, we reduced prices by Rs 2 a litre in retail,” said Angshu Mallick, chief operating officer, Adani Wilmar, which sells edible oil under the brand name Fortune. “A further reduction will depend on the commodity price movement in April.”
Cargill reduced retail edible oil prices Rs 1 a litre, said Piyush Patnaik, managing director-edible oil at Cargill India.
Mallick said prices were under pressure owing to factors such as record soyabean harvest in Argentina, low palm oil prices and a bumper mustard crop in India. Further, a strong rupee made import of edible oil cheaper for the country, he said.
Traders said crude palm oil price has fallen almost 8.3% to Rs 575 per 10 kg in the past two months due to higher production globally, lower tariff value and higher imports in India.
Similarly, refined soyabean oil price has fallen nearly 6.16% to Rs 784 per 10 kg on the back of higher imports and strong rupee. It is now trading at a 12-week low level owing to higher stocks at port, expectation of higher imports because of low tariff value and stronger rupee, said Anuj Gupta, deputy vice-president of commodity research at Angel Commodity.
Mustard price in April futures has fallen 5.83% in the past two months to Rs 4,012 per 100 kg, owing to slowing meal exports and almost 19% higher production this season, said Gupta. Futures prices were under pressure because of slowing of meal exports coupled with reports of higher production prospects in 2018-19 season, he said.
The industry pegs India’s edible oil consumption at 23.5 million tonnes for 2018-19.
Analysts said that soy bean and meal prices may remain low in the long run but see some firmness in the short term, with the weather office indicating the possibility of development of El Nino over the Pacific Ocean which could negatively impact the south west monsoon season between June and September.
“We have a record soyabean and mustard crop and consumption is similar to that last year. Hence, in the long term prices will remain subdued. The current upward movement in prices may not sustain. However, if large exports materialise from India, particularly mustard, then the situation can change for this oilseed,” said Prerana Desai, head of research at Edelweiss Agri Services and Credit.
Palm oil imports in 2018-19 are expected to increase 10% year-on-year to a record high because of the sharp fall in prices. According to the Solvent Extractors Association’s monthly update, import of refined palmolein imports surged more than 19% to around 241,000 tonnes.