The Centre has directed three edible oil associations to ensure reduction in prices by ₹15/litre with immediate effect.
While Indore-based Soybean Processors Association of India (SOPA) and Indian Vegetable Oil Producers’ Association (IVPA) have already written to their members advising them to reduce prices, the Mumbai-based Solvent Extractors’ Association of India (SEA) will issue a similar letter on Monday, sources said.
“We would advise you to kindly reduce the MRP of your brand commensurate with the fall in edible oil prices and pass on the benefit to the consumer, if not already done so,” DN Pathak, Executive Director of SOPA, said in his letter to members.
Asking its members to comply with the government’s request, an advisory issued by SP Kamrah, Secretary General of IVPA, said, “The Department of Food gave a presentation (at the meeting with industry) showing the reduction of prices in the domestic markets for edible oils are not in accordance with the reduction of prices in the international market. The department has requested edible oil manufacturers to (i) further cut the maximum retail price (MRP) of imported cooking oils by up to ₹10 per litre within a week, (ii) maintain a uniform MRP/prices of the same brand of oil across the country and (iii) to share with the department, the price reduction – every time a reduction is done.”
“The Centre also advised that the price to distributors by the manufacturers and refiners also needs to be reduced immediately so that the price drop is not diluted in any way. It was also impressed upon that whenever a reduction in price to distributors is made by the manufactures/refiners, the benefit should be passed on to the consumers by the industry and the department may be kept informed on regular basis. 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 in an official statement.
“Already many companies have reduced the prices and it would be gradually reflected as this sudden drop in global prices were unexpected and many had not hedged the risk,” said BV Mehta, executive director of SEA. He said all members in the meeting had agreed for the uniform MRP, but consumers will continue to get cooking oils at discounted prices depending on the location and retailer.
During the meeting held on July 6 with industry, Food Secretary Sudhanshu Pandey said the international prices of imported edible oils are on a downward trend which is a very positive picture and the domestic edible oil industry needs to ensure the prices in the domestic market also drop commensurately.
In May this year, the Ministry had convened a meeting with leading edible oil associations on the issue of price cut after which some of the leading brands had reduced their prices by ₹10/litre. Edible oil prices in the international market are witnessing a dramatic fall, however, the situation in the domestic market is slightly different as the fall in the prices are gradual, the Ministry said.
According to SEA data, imported Crude Palm Oil (CPO) from Malaysia (C&F Mumbai) rate has declined 31.7 per cent to $1,185 per tonne on July 8 from $1,735/tonne a month ago and the drop was more than 10 per cent in past week. Similarly, in imported Soya Degum Oil (Crude), the CIF Mumbai rate was $ 1,460/tonne on Friday, which is a 20 per cent fall from $1,825/tonne on June 8.