Consumers Likely To See 9% Drop In Edible Oil Prices By December; Details Here

Consumers can expect some relief as edible oil prices are set to decrease by up to 9 per cent starting mid-December, marking the first reduction in four months. This drop comes after a $100 per tonne decline in international prices for soybean, sunflower, and palm oil over the past two weeks.The price of soybean oil has fallen due to a global surplus in soybean production. Sunflower oil prices are also stabilising, while palm oil prices have dropped, partly due to Indonesia, the world's largest palm oil producer, delaying its biodiesel policy.Indonesia currently uses a 35 per cent palm oil blend in biodiesel, with plans to increase it to 40 per cent. However, this proposal has faced opposition from environmental groups, concerned that higher palm oil usage would lead to more deforestation. As a result, the Indonesian government is reconsidering its approach."In the last fortnight, prices of sunflower oil have tumbled from $1,300 per tonne to $1,200 per tonne, while soybean oil has fallen to $1,130 per tonne from $1,230 per tonne. Similarly, palm oil prices that are in transit have fallen to $1,220 tonne from $1,320 per tonne," said Sandeep Bajoria, CEO of Sunvin Group, an oil trading company, according to a The Economic Times report."Even in the wholesale market, prices of mustard oil have fallen by Rs 10 per litre to Rs 136. At the retail end, prices of mustard oil will too fall. By mid-December, edible oil prices should fall by 8 to 9 per cent," Bajoria said.India imports between 14.5 to 15 million tonnes of edible oils annually to meet domestic demand.Priyam Patel, managing director of NK Proteins, which produces edible oils under the Tirupati brand, explained that global soybean supplies remain abundant, with South America expected to deliver a record crop. This is likely to exert downward pressure on soybean oil prices.He also noted that the incoming US administration is expected to change its biodiesel policy, which could reduce the demand for vegetable oils in biofuel production, further alleviating price pressures."Additionally, a surplus in the global crude oil market has lowered crude oil prices, making biodiesel less competitive and reducing the demand for edible oils like palm oil used in biofuel manufacturing," Patel added.However, Patel warned that the recent decline in sunflower oil prices might be temporary.He also noted that Russia is likely to implement an increase in the export duty for sunflower oil in December, with a projected rise of 183 per cent. This could impact global sunflower oil prices, and if Moscow raises the export duty, it could lead to a price hike of Rs 40-50 per 10 kg, adding financial pressure on Indian consumers.Also Read: Punit Goenka’s Reappointment As ZEEL Director Rejected By Shareholders