In the Indian edible oil market, recent price changes have captured the attention of both traders and consumers. While mustard and soybean oil prices have shown an upward trend, groundnut (peanut) oil prices have dropped. Other oils like cottonseed and crude palm oil (CPO) have also seen price shifts, largely influenced by fluctuating demand, new crop arrivals, and supply chain adjustments.
Mixed Trends in Edible Oil Market
The past week brought a mixed bag of outcomes for different edible oils. Mustard oil, soybean oil, crude palm oil, and cottonseed oil prices rose due to lower supply of soft oils, particularly as the festive season approaches. On the other hand, groundnut oil and oilseeds experienced a decline in prices because of reduced trading activity and the arrival of new crops.
Experts in the market have pointed out that despite these price increases, certain oilseeds such as groundnut and soybean are still being sold below the Minimum Support Price (MSP). For instance, groundnut oil is being sold at 5-7% below the MSP, while sunflower oil is priced 20-25% below its MSP. This discrepancy continues to raise concerns, especially for farmers.
Soybean and Groundnut Prices Decline
Soybean oilseeds, in particular, saw a price drop due to weak demand for de-oiled cake (DOC), which is a by-product used in animal feed. At the end of the week, soybean grain and loose prices fell by ₹70 per quintal, with the prices closing at ₹4,830-4,880 per quintal and ₹4,605-4,740 per quintal, respectively. On the other hand, the cost of soybean oil in Delhi, Indore, and degum oil varieties witnessed increases, ranging from ₹650 to ₹1,000 per quintal.
Peanut oil followed a similar downward trend. Prices of peanut oilseeds dropped by ₹125, settling at ₹6,350-6,625 per quintal. Similarly, the price of Gujarat peanut oil fell by ₹275, closing at ₹15,100 per quintal. Refined peanut oil also experienced a ₹40 decrease per tin, signaling a broader trend of falling groundnut oil prices.
Mustard and Cottonseed Oil See Improvement
In contrast to groundnut oil, mustard oil prices increased due to limited availability and high demand. Mustard seed prices rose by ₹75 per quintal, closing at ₹6,675-6,725. Mustard oil Dadri prices also saw a significant jump of ₹250 per quintal, with prices closing at ₹14,000. The prices of Pakki Ghani and Kachi Ghani mustard oil increased by ₹40 each, reaching ₹2,175-2,290 per 15 kg tin. This trend reflects the rising demand for mustard oil, especially with the festive season around the corner.
Cottonseed oil prices also moved upward due to reduced supply and higher demand. Farmers are particularly happy with the increase in cottonseed prices, with reports showing a significant rise compared to last year. For instance, farmers in Khargone, Madhya Pradesh, received ₹7,400-7,500 per quintal, compared to ₹6,400 per quintal last year. In Mehsana, Gujarat, premium-quality cottonseed fetched up to ₹8,000 per quintal, which is significantly higher than last year’s rates. These price increases have contributed to the strengthening of cottonseed oil prices, which closed at ₹12,050 per quintal with a rise of ₹650.
Palm Oil Prices Surge Due to Biodiesel Use
Palm oil prices also saw significant improvements due to increased use of crude palm oil in biodiesel production overseas. The rise in demand for CPO to produce biodiesel is affecting the global supply chain, leading to price hikes in the Indian market. The price of crude palm oil increased by ₹450, closing at ₹11,550 per quintal. Meanwhile, Palmolein prices also surged, with Delhi Palmolein closing at ₹13,150 per quintal, an increase of ₹1,000, and Palmolein ex Kandla rising by ₹1,050, closing at ₹12,250 per quintal.
Market experts predict that as crude palm oil continues to be used extensively in biodiesel production, the supply of palm oil might become tighter in the future. This could lead to further price increases in the coming years unless steps are taken to boost oilseed production domestically.
Farmers Concerned About MSP
Despite some price improvements, many farmers remain concerned about the sale of oilseeds below the MSP. Groundnut, soybean, and sunflower oilseeds are still being sold at prices below government-mandated levels, which can negatively affect farmer income. The government is being urged to take steps to support farmers, especially as new crops start arriving in the market.
The Need for Stricter Laws on Animal Feed
In light of ongoing issues in the edible oil market, industry experts are calling for stricter laws on animal feed production. The growing business of fake oilcakes, used in animal feed, has become a problem in the market, and stakeholders are urging the government to regulate this issue more strictly. This would not only protect consumers but also stabilize the oilseed market, ensuring that only genuine products are sold.
This week’s fluctuations in edible oil prices reflect ongoing shifts in supply and demand across the country. As the festive season approaches, the market is likely to see more changes in pricing, with a focus on ensuring that farmers receive fair prices for their crops.
