Government of India Asks Edible Oil Firms To Cut Edible Oil Prices amid Softening of Procurement Prices

Amidst global palliation in the prices for edible oils, the Food Ministry of India has asked the companies catering to edible oils to extenuate the cooking oil prices (MRPs). The primary intent substantiating the announcement is to enable the consumers to yield the benefit of the global dwindling of prices.

The food ministry believes the worldwide downswing in the prices for cooking oils can be anticipated to come with optimism for the Indian edible oil market. In line with that, as per the official statement, the global prices of various edible oils have recorded the alleviation and have declined by USD 200-250 for each tonne in the last few months. However, it remains to be experienced in the retail market as it takes time.

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The decision included the reduced prices at which retailers and manufacturers dispense the edible oil to distributors. Moreover, the official meeting also included a discussion on several other significant issues, such as the collection of price data, edible oil packaging, etc.

The easing of the prices of edible oils is not only expected to help consumers pay less but also is being eyed to help satiate the rapidly distending inflation.

As of May 4, 2023, Mother Dairy made an announcement to make a curtailment of Rs. 15-20 per litre in the maximum retail prices of its cooking oils under the brand name "Dhara" (the brand name which the company uses to trade its edible oil).

The new stock is expected to arrive in the market next week. Also, as per the government data, as of May 4, 2023, the retail prices of various packed edible oils witnessed a range of Rs. 110.05 per kg for palm oil to Rs. 189.13 per kg for groundnut oil.

It is worth noting that India imports over half of its total edible oil requirements, with imports increasing from 56,42,918 tonnes to 69,80,365 tonnes between November 2022 and March 2023 compared to November 2021-March 2022.

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In the 2021-22 marketing year, India's edible oil import bill rose by 34% to Rs. 1.57 lakh crore, while in volume terms, it rose by 6.85% to 140.3 lakh tonnes.

As per Procurement Resource, the easing in the global prices for edible oil will make the prices of cooking oil go down in India. The decision by the food ministry of India to be vitally beneficial to the consumers and the MRPs at which various oil companies sell their cooking oils will be reduced significantly.