In accordance with the global market trends, the Centre has issued a directive to edible oil associations on Friday, urging them to promptly lower the maximum retail price (MRP) of key edible oils by INR 8-12 per litre. This reduction is expected to take effect immediately.
“Some companies which have not reduced their prices and their MRP is higher than other brands have also been advised to reduce their prices,” the food ministry said after a meeting, chaired by Food Secretary Sanjeev Chopra, with the industry representatives.
Price to distributors by the manufacturers and refiners also needs to be reduced with immediate effect so that the price drop is not diluted in any way, it said.
Additionally, it was emphasized that any price reductions offered by manufacturers/refiners to distributors should be promptly communicated to the industry and the ministry, with a clear directive to ensure that these cost savings are effectively passed on to the consumers.
With the edible oil prices continuing to show a downward trend and set to witness further reduction by the edible oil industry, the ministry said, “the Indian consumers can expect to pay less for their edible oils. The falling edible oil prices will help in further cooling inflation fears if any.”
In the second meeting held within a span of one month, key representatives from notable industry associations, namely the Solvent Extraction Association of India and the Indian Vegetable Oil Producers’ Association, were in attendance. The primary agenda of the meeting revolved around addressing the persistent downward trend in global prices of edible oils and seeking further strategies to reduce retail prices in the market.
During the meeting, the ministry emphasized that the international prices of imported edible oils are consistently declining. In light of this, it urged the edible oil industry to take necessary measures to ensure that the prices in the domestic market also reflect a proportionate decrease.
The industry received a directive to promptly pass on the price reduction witnessed in the global market to end consumers. It was emphasized that the current delay in implementing such price drops should be avoided, and instead, measures should be taken to ensure a swift and efficient transmission of the price benefits to the consumers.
“The leading edible oil associations were advised to take up the issue with their members immediately and ensure that the maximum retail price (MRP) of major edible oils to be reduced further by INR 8-12 per litre with immediate effect,” the ministry said in a statement released after the meeting.
The international and domestic prices of edible oil were on an upward swing during 2021-22 due to many geopolitical factors including higher input and logistic cost. However, the edible oil prices in the international market are witnessing a fall since mid-june 2022, it said.
“The fall in the prices of edible oils in the domestic market is gradually being reflected in the domestic market. However, the government feels the associations can further reduce the prices and provide relief to the consumers,” it noted.
Alternatively, the industry has conveyed that global prices for various edible oils have experienced a decline of USD 150-200 per tonne over the past two months. As a result, they have taken steps to reduce the Maximum Retail Price (MRP) and plan to decrease it even further in the near future.
“However, there is an element of time lag for reflection in the retail markets and the retail prices are soon expected to come down further,” the industry said.
The ministry had previously organized a meeting with prominent associations representing the edible oil industry. Over the course of a month, the maximum retail prices (MRP) of refined sunflower oils and refined soybean oil from several major brands were reduced by INR 5-15 per litre. A similar price decrease has also been implemented for mustard oil and other types of edible oils.
The decrease in oil prices was a result of two factors: the reduction in international prices and a lowered import duty on edible oils, making them more affordable. The ministry further advised the industry to ensure that the entire benefit of the reduced international prices is passed on to the consumers.
The meeting also encompassed discussions on additional topics, including price data collection and the packaging of edible oils.