A spokesperson for the ministry of food confirmed to FoodNavigator-Asia that edible oil prices in India have soared by almost 10% in the past month. “There’s been a price rise of about 6 (US$0.1) to 8 rupees per kg in the last month.”
Industry sources told FoodNavigator-Asia that palm oil has soared to 645 rupees per 10kg, rising almost 100 rupees, while soybean oil has gone up 70 rupees per 10kg to 750 rupees in the past 30 days.
“There is also a problem here with the dollar prices. The rupee has weakened considerably over the last one month and this is piling up pressure on the already vulnerable food prices,” he said.
According to industry data, India's vegetable oil imports rose by 59% in February to 87.5 million tonnes against 55 million tonnes in the year-ago period, and in the same period, the rupee has depreciated by 1.5 rupees per dollar.
On the cards
A recent Rabobank report forecast a rise in soybean and palm oil prices. “We raise our palm oil forecast this month along with soybean prices due to smaller global supplies. We expect shortfalls in oilseed production in major palm oil importing countries will continue to support palm oil export demand,” the report said.
India imports about 50% of its domestic requirement. The country imports palm oil from Indonesia and Malaysia, while the biggest soy bean oil import markets are Brazil and Argentina.
According to the ministry of food, prices of soy bean oil have been affected by conditions in South America. “We understand that this has been the worst expected soya crop in Argentina following drought conditions. It is impacting prices. Demand from China also remains strong while there is a shortage.”
A Mumbai-based trader in edible oils told FoodNavigator-Asia that import prices are expected to stay high. “They should increase domestic productivity by using better seeds which have higher oil content.”