Palm oil & Sunflower oil price hike by 60% in a year! Why cooking oil price rise this much?
In a situation where ordinary people are suffering as a result of the corona crisis and curfew, the average price of retail cooking oils reached a new height in May 2021, in the past 12 years. In particular, the prices of the most common palm oil and sunflower oils have risen by almost 60% in the last year alone.
Prices of cooking oils like groundnut, mustard, vanaspati, soy, sunflower and palm oil continue to rise in India. According to government data, the retail price of peanut oil has increased by 20 per cent in June 2021 compared to June 2020. Similarly, prices of mustard oil have risen by almost 50 per cent, vanaspati by 45 per cent and sunflower oil and palm oil by nearly 60 per cent each.
As of May, the price of vanaspati has gone up from Rs 90 per kg last year to Rs 140 this year. Similarly, the retail price of palm oil has gone up from Rs 87.5 to Rs 132.6, soybean oil from Rs 55 to Rs 158 and mustard oil from Rs 110 to Rs 163.5.
The demand for cooking oil in India is about 230 lakh tonnes. Of this, only 70-80 lakh tonnes is produced domestically. India fulfils 56% of the demand for cooking oil through imports. In terms of palm oil, India is the largest importer of palm oil in the world. Therefore, domestic oil prices are determined on the basis of international prices. According to the Solvent Extractors Association of India (SEA), the price of crude palm oil rose to $1,173 per tonne in April 2021 from $599 a year earlier.
In 2019-20, India imported 7 million tonnes of palm oil, 3.5 million tonnes of soybean oil and 2.5 million tonnes of sunflower oil, or about 13.35 million tonnes worth of cooking oil worth Rs 61,559 crore.
India is dependent on Malaysia and Indonesia, which fulfils 85 per cent of the world’s palm oil need. Prices have risen due to production shortages in both countries due to the corona pandemic.
Despite all this, the tax levied by the Indian government on cooking oils is high. Since February 2021, the Government of India has increased the import duty & tax on crude palm oil to 36.75%, including agricultural infrastructure and development cess and social welfare cess.
Similarly, the current import duty & tax on refined palm oil is 59.40% and the import tax on refined sunflower and soybean oil is 49.50%. It is said that if this import tax is reduced then the price will go down immediately.