Costlier palm, soy oils push Indian consumers towards mustard oil
In India, consumers are increasingly shifting to mustard oil as rising global palm and soybean oil prices, driven by the West Asia conflict and biofuel demand, make imported edible oils costlier. Strong domestic mustard production has further boosted mustard oil consumption and market arrivals.
Pune: The increase in prices of palm and soybean oils due to the West Asia conflict has led more consumers in India to switch to mustard oil, which was once considered an expensive cooking medium, according to experts.
Mustard oil has traditionally been costlier than palm oil and soybean oil. In March and April, domestic sales of mustard oil were 25% higher than in the year-ago months, according to data from industry body Solvent Extractors’ Association (SEA).
In volume terms, consumption of mustard oil increased by 1.5 lakh tonnes in both the months compared with the year-ago period.
India meets about 60% of its cooking oil demand through imports. While palm, soyabean and sunflower oils constitute the import basket, mustard, soyabean, groundnut and cottonseed oils are the prominent locally produced oils, in that order.
Experts said the diversion of palm and soyabean oils for production of biofuels has pushed up their prices in the international markets. Depreciation of the rupee has also made imports of cooking oils costlier, they said.
“It is for the first time that we are seeing mustard oil prices slightly lower than palm oil prices. In this situation, a home consumer will naturally buy mustard oil over palm oil,” said BV Mehta, executive director of SEA. The increase in demand for mustard oil was supported by record domestic production of mustard.
As imported oils became costlier, the local prices of mustard seeds increased to higher than the minimum support price (MSP) levels, increasing arrivals in the market and making more raw materials available for the crushing mills.
About a month ago, soybean oil was costlier than mustard oil by ₹10-12/kg. This difference has now reduced to about ₹3-4/kg as the international prices of soyabean are expected to soften.
The price of palm oil, which had increased to almost at par with mustard oil, has now become higher than mustard oil by about ₹2-3/kg.
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Source : The Economic Times
