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Edible oil prices have increased by up to Rs 3 per litre in the retail market as imports have become costlier due to fall in the rupee value and could rise more if the currency further depreciates against dollar.
Leading edible oil firms Adani Wilmar and Ruchi Soya that sell cooking oils under Fortune and Ruchi Gold, respectively, have already raised the retail price.
India imports nearly 10 million tonnes of edible oil, which is about 60% of the domestic demand. At present, the import duty on crude edible oil is 2.5% and 7.5% on refined edible oil.
"Rupee depreciation has an impact on all commodities including edible oils. There will be marginal impact on domestic prices as import cost has increased by 7-8%," Solvent Extractors Association Executive Director B V Mehta told PTI.
"The free fall in rupee against the US dollar will impact edible oil prices by Rs 3-5 per litre in the domestic market. Some of it has been absorbed by the manufacturers and some bit has been passed on to consumers," he added.
When contacted, Adani Wilmar Chief Operating Officer Angshu Mallick said the imported edible oils have become costlier by Rs 4.50 per litre because of rupee depreciation from around Rs 54 to over Rs 58 currently.
"We have increased the retail prices two times in the last 15 days by 50 paise each. Currently, we are holding on to the price. We will assess the situation and take a call on further increase in price in next seven days," Mallick said.
Mehta of industry body SEA said that the price increase would not be much as the global prices are lower by about 30% from the last year's level.
"In the recent past, edible oil prices in India remained subdued due to lower domestic demand and adequate global supply. However, since last 3-4 weeks, prices of major edible oil have been rising due to unfavourable USD-INR ratio. In the last 25 days, there has been increase of Rs 2-3 per litre in the retail segment," Ruchi Soya Managing Director Dinesh Shahra said.
Edible oil companies are, however, expecting that the normal monsoon this year would boost oilseeds production keeping a check on retail prices.
According to SEA, there will not be fall in import volumes because of weak ruppe as global prices continue to rule lower compared to the last year's level.
For instance, global price of palm oil is around $840 a tonne now, down from $1040 per tonne level in the year-ago period, it said.
Overall, vegetable oil imports in the 2012-13 oil year (November-October) is expected to 10.7-10.8 million tonnes, against 10.2 million tonnes last year, due to increase in consumption following rise in population and income level.
The total consumption of vegetable oil in the country is about 17.5 million tonnes.
