Edible oil prices may witness prices increase amid diminishing supplies in the wholesale market
The current market trends indicate that edible oil prices have hit their lowest point and are now steadily rising. This can be attributed to the decreasing supply in the wholesale market, which is expected to continue until the government releases a report on the area under sowing and the estimated output of various crops, including soybean.
The Director of Shantilal Oils Pvt Ltd and President of the Oil Merchants Association, Rajesh Thakkar, has reported that edible oil prices were at their lowest in mid-June but have slightly increased since the first week of July. With the upcoming festive season, there is expected to be even higher demand for edible oil, which could lead to further price increases.
Currently, soybean oil is being sold at a wholesale price of between rupees 1,670 to 1,690 per 15 kg tin, which was at its lowest in the last month, costing rupees 1,500 to 1,530 per 15 kg tin. Similarly, sunflower oil's price rises from its lowest price of rupees 1,500 to Rs 1,530 in the last month to rupees 1,670 to 1,690 per 15 liters. Oil prices were at their lowest in the last month due to the decision of the food ministry to direct edible oil manufacturers to cut the prices from 8 to 12 rupees per liter.
Concerns are being raised among oil traders regarding the potential hike in the price of edible oil due to unfavourable weather conditions in the United States. As one of the major producers of soybean crops, the US has experienced a significant 25% drop in sowing, leading to a potential imbalance between supply and demand. The delayed onset of rains in the US has further aggravated the situation, worsening the already dire circumstances. The adverse effect of delayed rainfall is also being felt in India, where the El Nino effect has caused a one-month postponement in the monsoon season. Consequently, new soybean crops are anticipated to enter the market in the period between October and November, which could further exacerbate the rise in prices of this essential commodity.
According to Procurement Resource, the market for edible oil has experienced a price increase compared to last month's prices as a result of decreasing supply. Unfavourable weather conditions and the adverse effects of El Nino are affecting their supply. Additionally, prices are expected to rise further due to an increase in demand during the festive season.
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