Edible oil prices have soared to an 11-year high. Why?
Prices of edible oils - such as mustard, soya, sunflower, and groundnut oils - have this month soared to their highest point in over 10 years, official data says, prompting the Indian government to take stock of the situation. The prices have increased up to 62% since last year, Food Secretary Sudhanshu Pandey said at a recent meeting. Here are more details on this.
The surge is worrying, more so because people are suffering economically due to weeks-long lockdowns in several states over the coronavirus pandemic. Officials have said the government is "concerned" about the dramatic spike. Earlier this week, the Department of Food & Public Distribution held a meeting with all stakeholders in this regard, asking them to take all possible measures to bring down the prices.
India imports nearly 65% of its annual requirement of 14.5 million tonnes of various cooking oils. Now, international prices of these oils have been on the rise since last year due to lower production by major suppliers - including Indonesia, Malaysia, Argentina, Ukraine, and Russia. The primary reason behind that is poor weather. A high import duty on crude palm imports is also responsible.
Official data suggests that there has been a steep rise in the prices of various cooking oils in India, from May 2020 to now. For instance, the average price of mustard oil rose from Rs. 115 to Rs. 170, and prices for palm surged from Rs. 85 to Rs. 138. Similarly, sunflower oil prices jumped from Rs. 110 to Rs. 175, and so on.
Customers have expressed their displeasure at the surge in prices, sharing how it affected their budgets. "Saffola has become very expensive. The five liter can which carried an MRP of Rs. 935 now costs Rs. 1,138...I purchased two days ago and was surprised to see the huge price difference," Shiuli Das from Mumbai said, according to The Times of India.
Offering a little relief, industry experts have assured the prices are likely to fall later this year. "We expect a gradual drop in prices in second half of OY21 as the global supply normalizes, however, the prices will still remain higher as compared to OY20," said Hetal Gandhi, Director at CRISIL Research, according to a report by Moneycontrol.
