Edible oil prices decline after import duty cut

Adani Wilmer, KS Oils, Gokul lower prices by up to Rs 6/kg.

Edible oil companies have started lowering prices following the government's decision to cut import duty on certain crude and refined edible oils.

On an average, prices of mustard oil, palm oil and cottonseed oil have come down by Rs 2-6 a kg in the past couple of days.

According to industry players, companies such as KS Oils Ltd, Gokul group, Mumbai-based Bharat Foods, Liberty Oil Mill and Adani Wilmer have started lowering prices of some oils following import duty cut.

"As a result of import duty cut, Gokul Refoils has reduced the prices of palm oil by Rs 4 a kg to Rs 55," Kanubhai Thakkar, MD, Gokul Group told Business Standard.

KS Oil, another leading player, on Sunday announced a price cut of Rs 2 a kg on mustard oil.

"As a leader in the edible oil industry, the company has decided to pass on the price benefit to consumers with immediate effect. This will see increased off take of retail packs thus giving us higher volumes and better margins," the company said in a release to the Bombay Stock Exchange.

Liberty Oil Mills, Bharat Foods and Adani Wilmer are few others which have brought down prices after the duty cut was announced. Palm oil prices have seen the maximum impact of the duty cut, which has come down by around Rs 4-5 a kg.

Currently, prices of palm oil are hovering around Rs 930 per 15 kg in Ahmedabad markets. "The prices of the same stood at Rs 1,050 per 15 kg sometime back," said Sureshbhai Shah, vice-president, Ahmedabad Oil Merchants Association.

Similarly, cottonseed and mustard oil prices have declined by Rs 2-3 a kg. Cottonseed prices have come down to Rs 1,000 per 15 kg, while mustard refined oil is at Rs 890 per 15 kg.

"The Centre's move will certainly bring down the prices of edible oils. In fact, companies have already started cutting prices," said BV Mehta, executive director, Solvent Extractors Association of India

On Thursday, the government cut import duties on some edible oils, including crude palm oil, to improve supplies and ease prices as the wholesale price index-based inflation hit a 10-month high. India is the world's biggest vegetable oil buyer after China.

The import duty on crude palm oil was cut to 20 per cent from 45 per cent, while that on refined palm oil was trimmed to 27.5 per cent from 52.5 per cent. However, the duty on soya oil was left unchanged.