Global Edible Oil Market Prices Likely to Remain Volatile

Mumbai: Global edible oil markets are likely to remain volatile in the coming months due to various factors, although the overall sentiment is that prices are likely to remain firm. The impact of the El Niño weather cycle, uncertainty over sunflower oil supplies due to the Russia-Ukraine war, and Indonesia’s B-50 biodiesel programme could create a significant imbalance between the demand for and supply of vegetable oils at the international level. As a result, the environment of rising and firm prices is likely to continue.

The president of a leading industry trade organisation, the Solvent Extractors’ Association of India (SEA), said that declining supplies of vegetable oils could increase difficulties for major importing countries such as India. India imports large quantities of palm oil, soybean oil and sunflower oil, and nearly 60 per cent of the country’s edible oil demand and requirements are met through imports. Developments in the global market have a direct and significant impact on the Indian edible oil market.

The association has already informed senior government officials about the situation. It is understood that the government is considering a reduction in import duties on edible oils to deal with the situation. There has been a sharp decline in edible oil imports, and imports of soybean oil and palm oil are being increased to compensate for the shortfall. This is indicating the possibility of a rise in their prices.

Meanwhile, sea freight costs have increased, while the value of the rupee has declined significantly against the US dollar. This is likely to push up edible oil prices in the domestic market.

The association has provided the Union Food Secretary with detailed information regarding the current stocks and supply situation of vegetable oils, and it is now awaiting the government’s next steps.