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.
