Edible oil and oilseeds prices showed a mixed trend in NCDEX near-term futures, a day after the center imposed stock-holding limits to control prices, rising since last year.
Traders and market watchers said that while prices for some items such as soybean seeds for January contracts were trading at a 2-3 percent discount from the previous close, it remains to be seen how long prices remain low with supply. The demand scenario and the global markets for oilseeds and edible oils are rising.
“With India importing about 60 percent of its annual edible oil needs, any upward trend in global markets will have an impact on domestic prices, and it remains to be seen to what extent current inventory limits will be able to bring prices down further,” he said. Trader of the leading commodity exchange. The burden is now also on states, he said, as to how and to what extent they enforce these limits.
Just as in the case of pulses, the stock holding announcement comes at a time when retail prices for selected edible oils have shown a slight moderate trend since last month.
Data obtained from the Ministry of Consumer Affairs shows that the prices of packaged soybean oil, sunflower oil and palm oil in Delhi markets have fallen by Rs 4-7 per liter in the last month. However, the price of mustard oil increased by Rs 1 per liter from Rs 189 to Rs 190 per liter.
However, compared to the same period last year, prices are still 50-60 percent higher depending on the oil.
Over the weekend, the central government imposed restrictions on stocks of edible oils and oilseeds until March 31, 2022.
An official statement said stock limits will be decided by states based on available stock and consumption pattern.
However, exporters and importers have been kept out of stock limits.
The center also directed countries to ensure that local stocks of edible oils and oilseeds are regularly updated on the Food and Public Distribution Portal.
This decision will reduce the prices of edible oils in the local market. The official statement said that the rise in edible oil prices on the international market has a significant impact on domestic edible oil prices.
India’s food grain production is likely to reach a record 150.50 million tons in the current Khareef season (2021-2022), while oilseed production is expected to reach 23.39 million tons, 2.66 percent lower than last year.
In oilseeds, groundnut production is estimated at 8.25 million tons which is 3.50 percent lower than last year, while soybean production is estimated at 12.72 million tons, 1.08 percent lower than last year.
Production figures as per first estimate for the 2021-22 (July-June) crop released a few months ago.
Prices of edible oils and pulses have been on fire since the past few months due to a sharp rise in global markets and reduced supplies.
This has badly affected the family’s budgets and all eyes are on the upcoming fall harvest to provide some help.