Significant Increase In Edible Oil Prices Likely

A projected fall in domestic oilseeds production, and the depreciation of the rupee against the US dollar are likely to push up the prices of major edible oils during the current year (1998-99), industry sources said here yesterday.

According to S K Chaddha, executive director, Vanaspati Manufacturers Association (VMA), edible oil prices will rise significantly in the coming months due to the shortfall in production of major oilseeds like rapeseed, mustard, soyabean and cottonseeds which were hit by unseasonal rains.

On the domestic front, agricultural experts have predicted a decline of about 4.75 lakh tonne in the production of cottonseeds.

 

A fall in soyabean oil carry-over stocks by 23 per cent during 1997-98 over the previous year also indicates a bullish outlook for edible oil prices this year, Chaddha said.

The depreciation of the rupee against the dollar has also made imports costlier, and will push up edible oil prices, he added.

Other factors likely to contribute to a rise in edible oil prices are tight global supplies, and a three-month ban on export of palm oil and palmolein imposed by Indonesia, he said.

According to Oil World, an international magazine on oilseeds and edible oils, Indonesian palm oil exports are expected to fall by 1.5 million tonne during January-June 1998.

Though talks are on to lift the ban, experts say it is unlikely for the time being as Indonesia had witnessed a sharp decline in its palm oil stocks to 5,00,000 tonne in late December from 8,30,000 million tonne a year ago.

Oil World .has also predicted a sharp rise in palm oil prices in the world market, especially in the next three-four months.

In the domestic market, prices of various edible oils have been witnessing a steady rise or firm tendencies during the last few months.

Edible oil prices in the Delhi market registered a significant rise with soyabean and cottonseeds oil leading the charge with over eight per cent rise between December 20 and January 20.

According to figures compiled by VMA, the price of mustard expeller rose by 6.8 per cent to Rs 3150 a quintal from Rs 2,959. Prices of vanaspati and sesame also registered gains. with a rise of 2.8 and 3.2 per cent respectively during the same period.