Mumbai: India’s efforts to reduce oil prices that can be eaten from important countries have been destroyed by a surge in global palm oil prices to record the highest after Indonesia, the largest supplier, moved to exports.
The attention of voters who are very sensitive to food price inflation, the government is trying to control domestic prices by reducing import taxes, imposing stockpile limits and suspending futures trading in edible oil and oil.
The effort initially produced several success.
But when India imports two-thirds of edible oil, the benefits of cutting tasks and other steps have been almost removed by a global price surge after Indonesia ordered producers to sell 20% of local sales to the domestic market for local cooking oil prices.
“The Indian step has complicated India’s efforts to reduce prices,” said B.V.
Mehta, Executive Director of the Mumbai Solvent Association based in India (sea).
Spot price of palm oil, the most consumed vegetable oil in this country, has risen more than 12% so far in 2022 to Rs 1,228 per 10 kg after reaching a record high of 1,280.75 on May 2021.
rival oil prices such as Soyoil and Sunflower oil soared when buyers rushed to replace the volume of oil palm losts, increase imported bills for the largest edible oil importer in the world and make it difficult for New Delhi to control consumer costs.
Previously, oil palm oil so far is the most imported oil in India, but “at the current price level there is no advantage of buying palm oil,” an Indian distillation, who refused to be named.
Crude palm oil (CPO) is offered around $ 1,450 per ton, including costs, insurance and shipping (CIF), in India for March delivery, compared to $ 1,490 for raw soybean oil and $ 1,455 for raw sunflower oil, the trader said.
A year ago, palm oil traded with a discount of around $ 100 and $ 250 per ton for soybeans and solar flower oil each, both of them are considered as better quality than palm oil.
India’s retail food price inflation rose to 4.05% in December, and analysts expect it to remain in the trend in the next few months.
How this has an impact on elections in Uttar Pradesh, the largest state in India, and the prize that is currently controlled by the Bharatiya Party Janata Minister Narendra Modi, will be closely watched.
Voting began there on February 10, and will be followed by elections in Goa, Punjab, Manipur and Uttarakhand for the next few weeks.
But there is a little more that the government can do to reduce the price of edible oil.
“It cannot reduce further import tax.
The only choice it has is to subsidize edible oil,” said Mumbai-based dealer with a global trading company.
“It can sell oil that can be eaten at a lower price for the poor through a public distribution system.
But this requires a lot of funds and the government has struggled to load a fiscal deficit.” Officials have even lobbied members of an edible oil trade body to keep to close at prices, but meet with the hard market reality.
“We cannot sell imported oil at a price lower than our purchase price,” said Mumbai-based vegetable oil refining.
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