Branded oil prices to fall on duty cut

Consumers will soon have something to cheer about. With the government announcing 10 per cent reduction in the import duty on edible oil most domestic branded oil companies are planning 5-6 per cent cut in prices.

Pranav Adani, executive director, Adani Wilmar, which sells edible oils under the Fortune, Raag and Jubilee brands, said the duty cut was a positive step.

"We would be reducing prices by about 5 per cent and the new prices will be announced in a few weeks," said Adani.

The retail price for Fortune sunflower oil is Rs 350 for a five-litre pack, while Dhara, the other leading sunflower oil brand, retails at Rs 390. Loose sunflower oil sells at about Rs 300 for five litres.

Retailers said they are yet to see any changes in wholesale prices.

As per the new duty structure, crude sunflower oil will attract 65 per cent import duty from 75 per cent earlier and refined sunflower oil will face a custom duty of 75 per cent from 85 per cent earlier.

For Marico, the leading player with well-known brand Saffola, the impact is likely to be negligible.

Chaitanya Deshpande, head (corporate finance), said the new duty structure will only affect the Sweekar brand, which is a non-focus brand for the company.

"While we are not actively looking at taking any action (on prices) following the announcement, if other players reduce prices we would have to react, given that this is a very competitive category," said Deshpande. The other large brands such as Cargill (Nature Fresh), Parakh Foods (Gemini) and Agro Tech Foods (Sundrop) too are likely to revise prices, said analysts.

This companies could not be reached for comment.