India imports nearly 70% of its edible oil, and industry insiders say oil consumption could decrease by around 20% as prices for all types of oil, sunflower, soybean, palm oil or mustard oil have risen sharply recently.
Even the government has ordered more imports of soybean oil to stem the rise in prices, as all oils retail at over 150 rupees per liter.
Shankar Thakkar, president of the All India Edible Oil Traders Association, has proposed that the government ban future edible oil trades to stem the rise in prices.
Thakkar also wants the government to investigate the FSSAI’s delay in releasing imports. He said that all ports of entry across India were experiencing delays in processing shipments due to the lack of FSSAI staff. He claimed that the labor force in the ports of entry had been reduced to around 15%, which delayed clearance, another reason for price increases.
Thakkar added: “Due to the Covid pandemic, the supply chain has also been disrupted. Freight prices have doubled and prices have increased. “
Another factor that influenced the price hike was the weather. In Brazil, South America in particular, the weather has spoiled the soybean harvest and affected soybean oil production.
Also, India only imports crude palm oil from the Southeast Asian countries, and the refineries are scattered across India. Thakkar says there are only two refineries in Maharashtra so demand cannot be met and has been restricted due to Covid travel.
On May 7th, prices for palm olein oil on the international market were 1225 USD / MT, for soy crude oil -1360 USD / MT and for sunflower crude oil at 1620 USD / MT.