Edible oil prices may go up again

Prices of edible oils are set to rise again soon, by Rs 2-3 per litre. This spells bad news for householders and those in the food business as cooking oil rates have already witnessed a rise of almost 25 per cent since last year.

The rising trend in prices is mainly attributed to the widening gap in demand and supply across the world. The consumption of edible oils for producing bio-diesel is aggravating the problem.

In India, where the annual consumption of edible oils is estimated around 12 million tonnes, over 45 per cent of the demand is met by imports.

The rate of cooking oil around a year ago was between Rs 45-50 a litre and it has increased to Rs 55-60 per litre now. Apart from shortage in other countries, local production is almost stagnant for more than last seven years, which is bound to impact the prices in India.

With edible oils being an essential part of cooking, consumers household budget is highly affected.

A R Sharma, president, Solvent Extractors Association of India, said on account of shortage, prices are bound to increase further soon. " Government policies have not been very encouraging for local producers. There is an urgent need to take measures in the direction so that edible oil rates are not affected.''

To control this gap, solvent extractors have been asking the government to take measures in the direction of improving oil seed yield in India. While most of the requirement for soyabean oil and palm oil is met by Argentina, Brazil, Malaysia and Indonesia, local production concentrates on mustard oil, groundnut oil, sunflower, cotton seed oil and rice bran oil.

Not only has high raw material cost been making this industry uncompetitive, low yield of oilseeds has created problems like under-utilisation of existing capacities