Cheaper cooking oil
INDIA imports 55-60 per cent of its edible oil requirement. The international, and hence domestic, prices were on an upward swing during 2021-22 due to several factors. The edible oil prices in the international market have been shrinking for the past six months, but the downtrend trend has not got reflected in domestic prices. Even bumper crops of groundnut, soyabean and mustard did not result in price cuts. The Centre’s intervention is set to bring some relief. The industry representatives have been asked to ensure that the maximum retail price is reduced with immediate effect and the benefit of duty cuts is passed on to consumers. Companies have decided to reduce the prices of cooking oil by up to 6 per cent. A leading firm has already announced a cut of Rs 15-20 per litre across variants.
Feeling the pinch, lower and middle-income households have been downgrading the oil they use for cooking. Many have cut consumption. Government data shows that though there has been a decline in retail prices in the past one year, the drop has not been commensurate with the fall in global prices. At the same time, edible oil imports have witnessed a sharp spike owing to the softening prices.
A reduction in edible oil prices is set to bring down retail inflation proportionately. Retail inflation eased to a 15-month low in March, slipping below the upper threshold of the Reserve Bank of India. However, the average Indian is still at the receiving end. Doling out statistics that project India’s food inflation as moderate compared to that of several other countries brings little solace. Milk prices, for instance, have been on the rise since 2022 and are unlikely to fall. The next monetary policy review in June would depend on data linked to the trajectory of the monsoon and crude oil prices, which still pose the risk of inflation.
