The edible oil maker companies of India have cut down the wholesale prices of edible oil sharply on Tuesday across the country. The companies have taken the decision following the Governments latest decision of scrapping the import duty on crude edible oils. The industry sources have informed that the average price cut of the edible oils was by Rs 5,000 per tonne in Mumbai and the soy oil price has been decreased from the previous Rs 595 to Rs 536 per 10 kg trading lot in Indore.
The oil traders in India have stated that the move has actually surprised the industry as the last reduction in duties did occur less than a fortnight ago and the international prices have also been falling. The sources informed that the prices of edible oils were not recorded in the Mumbai commodity exchange on Tuesday and a number of the traders have suspended their operations on the day. The sources added that the market sentiment was further weakened by fears that the state governments are likely to impose storage restrictions on the companies.
An analyst from the Indian edible oil market has commented that a zero per cent duty on soya oil is going to lead to a reduction of between Rs 4,000 and 8,000 per tonne in the local market. The analyst added that the traders are also expecting the retail prices of refined oils to get reduced by Rs 3-5 per kg. According to a trader, "The impact of duty reduction in the case of palm oil will be Rs 3 per kg. The market is highly volatile due to a recent report of the United States Department of Agriculture on the soyabean crop prospects this year. We will wait for the markets to stabilize and take a decision after a week on reducing the prices". The trader added that the price of refined soy oil did rise by Rs 70 to Rs 620 per 10 kg, in Mumbai markets during the last three months and the refined palm oil price also increased by Rs 60 to Rs 574 per 10 kg over the same period. It can be noted here that the Indian government has scrapped the import duty on crude edible oils and announced a reduction of 7.5 per cent in the import duty on refined oils, on Monday. Commenting on the issue, the Managing Director of Ruchi Soya Industries Ltd, Mr. Dinesh Shahra said, "The duty reduction was a big surprise, it would be against the interest of farmers in the long term".
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| Posted : 4/3/2008 |
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