Edible Oil Prices Likely to Rise by 7-8%

Mumbai: Indian companies are likely to raise edible oil prices by 7-8% ahead of the peak festive season (Dussehra-Diwali) due to high import costs, a weak rupee, and global market pressures. However, robust arrivals of domestic oilseeds will boost the supply and availability of edible oils; furthermore, if the government cuts import duties as expected, the price hike will remain limited.

India is the world's largest importer of edible oils, with its import dependency rising to over 58%. The Indian edible oil market is directly impacted by fluctuations in global markets and the volatility of the rupee's exchange rate.

If edible oil prices are raised, it will mark the third such hike since March. Prices were increased twice—by 5-6% each time—between March and June, resulting in a cumulative rise of 10-12%. Importing crude edible oils has become costlier due to high global market prices, increased shipping costs, and the significant depreciation of the rupee against the dollar.

These factors have severely squeezed the margins of Indian processors and refiners, potentially forcing them to raise prices. On September 12, import costs at the Mumbai port were recorded at $1,265 per tonne for crude palm oil, $1,314 for crude soy oil, and $1,380 for crude sunflower oil.