In the wake of recent developments in the global edible oil market, cooking oil prices in India have experienced a significant surge, escalating by up to 15% within the span of just one month.
This unprecedented spike in prices has raised apprehensions within the Modi government as it embarks on its third term, with mounting pressure to curb food inflation and mitigate its impact on household budgets. Major players in the industry, including Adani Wilmar, Emami Agrotech, and Sunvin Group, have attributed the price hike to disruptions in soyabean oil supplies originating from Argentina and Brazil. The ongoing worker protests in Argentina, coupled with flooding incidents in Brazil’s key agricultural regions, have severely hampered soyabean oil production, leading to a noticeable scarcity in the market. Furthermore, domestic factors have also contributed to the surge in edible oil prices, particularly in the case of mustard oil. The significant procurement of mustard seeds by government agencies like NAFED and HAFED has created a supply-demand mismatch, prompting mustard farmers to withhold their harvest in anticipation of further price escalations, despite the mustard seed prices already hitting the Minimum Support Price (MSP) threshold.
Industry experts have expressed concerns over the tight supply situation across various edible oil categories, including sunflower oil and palm oil. The off-season in major exporting countries like Russia and Ukraine, coupled with adverse weather conditions impacting crop yields, has exacerbated the supply constraints and propelled prices upwards. While stakeholders anticipate a continued firmness in edible oil prices in the near term, the Modi government faces mounting pressure to address the inflationary implications of this unprecedented surge. With households bearing the brunt of rising cooking oil costs, there is a pressing need for policy interventions and market reforms to stabilize prices and alleviate the financial burden on consumers.
