Edible oil firms cut prices as commodity costs fall
Edible oil majors such as Adani Wilmar and Emami have begun cutting prices of key brands as they pass on the benefit of the drop in global prices to consumers.
Edible oil majors such as Adani Wilmar and Emami have begun cutting prices of key brands as they pass on the benefit of the drop in global prices to consumers. The food ministry had urged manufacturers to reduce prices in a meeting with industry bodies this week.
“We have been reducing the maximum retail price (of edible oils) since January. This is in line with the correction in commodity prices. Further price reductions could happen if the situation requires,” Angshu Mallick, MD & CEO, Adani Wilmar, said.
Since January, Adani Wilmar has reduced the price of its one-litre Fortune soyabean oil by nearly 18%. From Rs 170 in January, it now stands at Rs 140 a litre (in May), sector experts said. Mallick said price cuts had helped the company to grow volumes over the last few months.
In the March quarter of FY23, Adani Wilmar’s branded edible oil sales volume grew by 4% over the year-ago period, following a robust consumer demand due to softened edible oil prices, the company said when declaring its March quarter results on Wednesday.
Aditya Agarwal, director, Emami group, the producer of the Healthy & Tasty edible oil brand, said, “We have been cutting prices since January this year by about 2-3% a month. We are passing on the decline in prices to consumers.”
Mother Dairy on Wednesday announced a cut in the MRP of its Dhara brand of edible oil by Rs 15-20 a litre across variants with immediate effect.
Cargill India, which manufactures brands such as NatureFresh, Gemini and Sweekar, was not immediately available for comment.
“The international price of edible oils has sharply reduced in the last 3-4 months. However, domestic prices have not sufficiently reduced in line with falling international markets,” the food ministry stated in its meeting on Thursday with representatives of Solvent Extractors’ Association of India (SEA) and Indian Vegetable Oil Producers’ Association.
Meanwhile, SEA said in a statement on Friday that most of the major brands had reduced the prices of edible oils during the last few months in line with the falling international market rates. “Now, we have advised the members to reduce MRP and wholesale price of edible oils further,” it said.
Edible oil processors informed the government that the global price of various edible oils had fallen by $200-250 a tonne in the last two months. “But it takes time to reflect in the retail markets and the retail prices are expected to come down shortly,” they said.
The landed price of palm oil (at Mumbai port), which has close to 60% share in the country’s import basket, declined by 44% to $1,000 a tonne on April 28 this year, against the $1,791 a tonne that prevailed a year ago. Landed prices of crude soya and sunflower oil have declined by 50% and 55% to $960 a tonne and $990 a tonne, respectively.
India imports about 56% of its annual edible oil consumption of 24-25 million tonne (MT). About 8 MT of palm oil is imported from Indonesia and Malaysia annually.
The share of domestic edible oil includes mustard (40%), soyabean (24%) and groundnut (7%) and others.
The retail inflation in oil and fats categories declined by 7.86% in March 2023 year-on-year. For mustard oil, prices declined by 14.65% last month. Inflation in refined oil (sunflower, soyabean and palm) also declined by 10.93% in March 2023.
