Edible oil prices rise sharply
Part of: GS Prelims and GS -III – Economy
- Edible oil prices have risen sharply in recent months.
- Increase in prices was observed in six edible oils — groundnut oil, mustard oil, vanaspati, soya oil, sunflower oil and palm oil.
- With rising incomes and changing food habits, consumption of edible oils has been rising over the years.
- One main reason for increase in prices is the shift in usage of edible oils from food to biofuel.
- Other reasons are: More buying by China, labour issues in Malaysia, Impact of laNina on palm and soya producing areas and imposition of export duty on crude palm oil in Indonesia and Malaysia
- To immediately reduce the prices, the import duty must be reduced which has increased because of imposition of cess after the budget.
Important value additions
- The major sources of these imports are Argentina and Brazil for soybean oil; Indonesia and Malaysia palm oil; and Ukraine and Argentina again for sunflower oil.
- The domestic demand of edible oil is around 24 Million Tonnes (MT) while India produces only 11 Mt.
- Thus, 13 MT of edible oils is imported.
- While mustard oil is consumed mostly in rural areas, the share of refined oils —sunflower oil and soybean oil — is higher in urban areas.