Edible oil prices rise sharply

  • IASbaba
  • May 31, 2021
  • 0
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Edible oil prices rise sharply

Part of: GS Prelims and GS -III – Economy 

In news

  • Edible oil prices have risen sharply in recent months.

Key takeaways 

  • 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. 

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