Brace to pay more for edible oil as global conflicts disrupt supply

Vijay C Roy

Chandigarh, June 19

The prices of edible oil, which has witnessed a price increase in recent months driven by multiple global factors, may go up further by Rs 6 to Rs 12 per litre. According to solvent extractors, consumers are unlikely get any respite from soaring prices before November.

“The prices have risen in the recent past and expected to rise further in near future because of demand and supply mismatch. We expect that the price is expected to stabilise after the arrival of soybean and rice bran oils which comes in October-November,” said AR Sharma, Chairman, Ricela Group. The Industry anticipates that the price will increase by Rs 6 to Rs 12 per litre before November.

The price increase can be attributed to a range of factors such as increased product demand and a decline in production, leading to price hikes of Rs 6 to Rs 12 per litre in most edible oils.

According to data, India’s total consumption of edible oils is pegged over 230 lakh tonne. The country is currently the world’s top importer and second largest consumer of edible oil in the world with imports was over 165 lakh tonnes in the last fiscal year, as domestic production was not enough to meet the demand. Out of the total import, around 80-85 lakh tonnes were palm oil. Other edible oil includes soybean oil and sunflower oil.

Industry insiders said sunflower oil supply from Russia and Ukraine was limited due to the off-season, aggravated by high temperatures impacting both end-season and upcoming crops. This disruption has also led to increased demand and prices for alternative oils. The Russia-Ukraine conflict has particularly impacted the global supply of sunflower oil, with Ukraine being a major producer.

Further, workers’ protests in Argentina and floods in Brazil, have significantly disrupted soybean oil supplies. Also, lower crushing of soybean this season and reduced shipments from Argentina via Brazil have tightened supply, leading to a price hike.

Additionally, the Israel-Palestine conflict has further contributed to supply chain disruptions, affecting the availability and pricing of various edible oils. Transportation challenges, including port blockages and shipment delays, along with increased freight costs, have exacerbated the situation, adding to the overall price surge.

Priyam Patel, Managing Director of NK Proteins Private Limited, said: “Stabilisation is expected as market conditions adjust and geopolitical tensions potentially ease. Additionally, increased production in upcoming harvest seasons is anticipated to boost supply, helping in stabilising prices.”