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Pulses, edible oil prices rise due to prolonged monsoon

Peanut Market News September 19, 2020

Pulses, edible oil prices rise due to prolonged monsoon

Two months to Diwali, prices of food commodities such as pulses and edible oil have risen persistently due to prolonged monsoon rains, which have also increased the likelihood of onion prices staying firm until November. 

The Centre’s food support to the poor through the lockdown increased the demand for chana, causing its prices to head north. Meanwhile, Nafed has started offering moong to states to ease supplies. Nafed has sold 5 lakh tonnes of chana of the 9.73 lakh tonnes it has to supply under the Prime Minister Garib Kalyan Yojana (PMGKY) up to November 2020. Chana dal prices have increased from 45/kg in June to 65/kg to 70/kg in September. 

If the institutional consumption increases with opening up of hotels and restaurants, trade expects the prices to increase further by November/December. Nafed has started offering raw or milled moong to states to tame the rising retail prices. It has also started procurement of moong of the new harvest. 

Despite demand destruction, the year-on-year increase in price is 24% for groundnut oil, 37% for mustard oil, 26% for sunflower oil, 35% for refined palm oil and 17% for refined cottonseed oil. There will not be any relief from high edible oil prices at least until mid-October. 

“As India is heavily dependent upon imported edible oil, domestic edible oil prices are moving in tandem with the international edible oil prices, which have been rising due to lower than expected production,” said BV Mehta, executive director, Solvent Extractors Association (SEA) of India. “International prices of sunflower oil, soybean oil, palm oil are rising due to different reasons. There is also diversion of edible oil for production of biodiesel.” 

Mehta expects that once the arrival of kharif groundnut and soybean gathers pace mid-October onward, edible oil prices may move lower. 

“The overall sentiments are bullish in the edible oil complex. Soybean oil futures are on a bull-run and steady on the way to approach its lifetime high amid reports of crop damage due to incessant rains,” said Subranil Dey, a senior research analyst at SMC Global Securities. 

Source: https://economictimes.indiatimes.com/news/economy/agriculture/pulses-edible-oil-prices-rise-due-to-prolonged-monsoon/articleshow/78182056.cms

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