Food Inflation: Fat's in the fire as edible oil prices rise 10%

MUMBAI/NEW DELHI: Edible oil prices soared almost 10%-Rs 6 to 8 per kg-in the last one month, piling up pressure on the already vulnerable food inflation. Palm oil, which accounts for nearly half of India's refined oil consumption, went up Rs 10 per kg following a sharp rally in international markets.

India imported about eight million tonne, or half of its domestic vegetable oil requirement, last year. A weakening rupee has been another trigger for the rising edible oil prices.

"There has been the worst expected soya crop in Argentina following drought conditions, and demand from China remains good. On the domestic front there are rumours about private cartels rigging the prices in the futures market by taking advantage of the global scenario," said Angshu Mallick, CEO, Adani Wilmar, which is the market leader in the domestic packaged refined oil market.

Palm oil price has soared to Rs 645 per 10kg, rising almost Rs 100, while soyabean oil has gone up Rs 70 per 10kg in the last 30 days. "Supplies of edible oil are reducing and therefore global prices are going up. Rupee has also weakened in the past few weeks. These are factors affecting domestic prices," said Siraj Chowdhry, chairman of Cargill India.

The latest price rise has experts and officials calling for urgent reforms to expand acreage and productivity of oilseed crops in the country.