Edible oil prices in India have recently been experiencing a decline amid passive demand

Edible oil prices in India have recently experienced a downward trend across major categories, including mustard, groundnut, soybean oilseeds and oils, crude palm oil (CPO), and palmolein. This decline aligns with a broader slump in global markets, where edible oil prices have softened. (Despite this drop, imported oils have become costlier domestically due to recent adjustments in import duties and exchange rates, increasing costs by approximately Rs. 150 per quintal.)

Consumption of palm and palmolein oils has remained low, reflecting demand-side challenges as their prices remain relatively high. Similarly, the high cost of sunflower oil has limited its imports. The combined impact of these factors raises concerns about meeting domestic demand, even as soybean oil imports have increased slightly.

Adding to the complexity, oil mills in India are operating below capacity. While soybean production has risen, market arrivals have fallen short of expectations, leaving mills with insufficient raw materials. Declining prices of by-products such as groundnut oilcake and soybean de-oiled cake (DOC) have further dampened demand, affecting the profitability of oil mills.

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In the by-product market, the lack of demand for oilcakes has become a critical issue. Groundnut oilcake and soybean DOC require government intervention to stabilize prices, potentially through procurement initiatives or export promotion. Additionally, with cotton production also declining, authorities have advised against selling groundnut seeds below the minimum support price to ensure future stock availability. These measures are crucial to address the challenges facing India’s edible oil and oilseed sectors.