iGrain India - The prices of edible oils in India have softened due to a decline in global market prices, particularly for oilseeds such as mustard, groundnut, and soybean, as well as the edible oils derived from them.
Crude palm oil (CPO) and RBD palmolein have also experienced pressure, with prices falling to around $1200–$1205 per ton from $1240–$1245 per ton last week.
While this reduction has brought some relief, the high price of these oils, particularly CPO and RBD palmolein, is still affecting demand, as consumers and industries adjust to the elevated costs.
However, despite the price decline in the international market, factors like the increase in customs duty and the depreciation of the rupee have led to higher import costs.
The Government of India responded by raising the minimum import price of oils, which has added approximately Rs 150 per quintal to the cost of imported oils. This, in turn, has further pressured domestic consumption, as higher prices for palm oil and sunflower oil have reduced their import volumes.
The import of soybean oil did see a slight increase in December 2024, but overall, concerns remain regarding the adequacy of supply to meet domestic demand. Indian oil mills are also not operating at full capacity due to a lower-than-expected arrival of oilseeds in the markets,
leading to worsening economic conditions for the millers. Moreover, a decline in the price of soy DOC (de-oiled cake) and other by-products is further exacerbating their financial strain.
This scenario points to potential challenges in balancing domestic supply and demand for edible oils in India.