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Ruchi Soya Industries, the largest edible oil refiner in the country, is planning to cut edible oil prices by 10 per cent by Diwali, as prices have started to cool off in the global markets.
“We do not want to put a number to it because of uncertainty in weather conditions ahead of kharif harvesting season. While the price cut would depend upon several other factors, at least 10 per cent decline is possible before Diwali,” said Dinesh Shahra, managing director of the company on the sidelines of Globoil, a two-day event here on Saturday.
The company has already reduced retail prices by 20 per cent across all edible oils. Consumers might see some more price correction by Diwali.
Malaysian crude palm oil (CPO) futures for delivery in November hit a five-and-a-half-year low on Friday to hit 1,914 ringgit a tonne, due to an oversupply of alternative oilseeds.
The world is facing an oversupply of crude palm oil from Malaysia and Indonesia. The two countries together produce about 85 per cent of the total global production. Malaysia, the second-biggest producer after Indonesia, reported 9.1 million tonnes (mt) of CPO churning between January and June, up from 8.4 mt in the same period last year. Indonesia has estimated a total CPO output this year at 29.5 mt, up 6.3 per cent from 27.8 mt in 2013.
In the upcoming oil year, Shahara pegs consumption of vegetable oil at 20 mt and this year due to lower prices consumption is expected to move up. Ruchi Soya’s refining capacity this year is up by 75 per cent compared to 50 to 55 per cent last year. Refining capacity of the company stands at 3 mt, while crushing capacity stands at 4 mt.
Currently, the company is focusing on its brands and have re-launched Sun Rich and Mahakosh brands and is expected to launch a rice bran oil by Diwali mostly under the brand of Mahakosh. Mahakosh brand is already valued at Rs 2,000 crore.
