In charts: Will rising edible oil prices fry your kitchen budget?
Subscribe to enjoy similar stories. Edible oil prices are on the boil again. The ‘oils and fats’ group in India’s consumer price index rose 2.5% year-on-year in September, marking the first increase in nearly two years and adding inflationary pressures at a time when the country is already reeling under the strain of high food prices.
Headline inflation jumped to a nine-month high of 5.49% last month, with food inflation surging to 9.24%. A concoction of global and domestic factors is responsible this rise. First, the government hiked import duties on key crude and refined edible oils such as soyabean, sunflower and palm oil from 14 September.
As a result, the effective duty on crude edible oils increased from 5.5% to 27.5% and on refined edible oils from 13.75% to 35.75%, data from the Solvent Extractors’ Association of India showed. The government says the duty hikes aim to protect domestic oil seed farmers against the softening of edible oil prices globally. “The government aims to preserve a floor price for these sellers by decoupling Indian supplies from global supplies," said Debopam Chaudhuri, chief economist at Piramal Enterprises.
Also read | Inflation upshoot: Worse than expected The import duty hikes were immediately followed by a sharp rise in retail prices of packed edible oils, particularly palm oil, sunflower oil and soyabean oil, data from the government’s Department of Consumer Affairs showed. However, an uptick in global prices in recent weeks has worsened the situation. Many Indian households use sunflower and soyabean oil in their daily cooking, while palm oil is a major ingredient in sweets, biscuits and cakes, not to mention cosmetics, soap and detergents.
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