Edible oil, rice and wheat prices on decline

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The Ministry of Consumer Affairs, Food and Public Distribution on October 8, 2021, said that there is a declining trend in domestic retail and wholesale prices of edible oils after a relaxation from import duty last month.

The Department of Food and Public Distribution (DFPD) said that “while the international prices of edible oils are increasing, the domestic market has reported a declining trend in prices with an exception”.

Reduction in Import Duty

The reduction in import duty has resulted in a reduction in the net effective range of domestic prices from 3.26 per cent to 8.58 per cent, even though international prices have risen between 1.95 per cent and 7.17 per cent. The import duty cut came into effect from September 11.

Price reduction in oil prices

“International prices of soyabean oil, sunflower oil, crude palm oil and RBD Palmolein increased by 1.85 per cent, 3.15 per cent, 8.44 per cent and 10.92 per cent, respectively over the month. After the import duty reduction on imported edible oils, domestic retail and wholesale prices reduced in the range of 0.22 per cent to 1.93 per cent,” said the Ministry of Consumer Affairs, Food and Public Distribution in a statement.

“However, mustard oil is purely domestic oil and its prices are expected to soften with the number of other measures the government is contemplating,” the Ministry added.

Wholesale price of Wheat & Rice decreased

Similarly, according to ministry data, the wholesale and retail prices of wheat have decreased by 5.39 per cent and 3.56 per cent, respectively. The wholesale price of rice decreased by 0.07 per cent, while the retail price of rice increased by 1.26 per cent during the month.

“Despite the fact that the MSP for rice has increased from Rs 1,868 per quintal to Rs 1,940 per quintal and for wheat from Rs 1,925 per quintal to Rs 1,975 per quintal – the price of rice and wheat has come down in the market which is a comforting factor for consumers,” the Ministry said.

Reduction in Inflation Forecast

On October 8, 2021, RBI said that it has reduced the CPI inflation target for FY22 to 5.3 per cent from 5.7 per cent earlier. In this, the July-September CPI inflation was also 5.1 per cent as compared to 5.9 earlier. October-December CPI inflation is expected to remain at 4.5 per cent as against 5.3 per cent earlier. This means that the domestic retail and wholesale prices of edible oils, wheat and rice may see a further decline.