Edible Oil: On Wednesday, the prices of most oilseeds experienced a decline, influenced by drops in international markets. Mustard oilseeds, groundnut oilseeds, soybean oil, crude palm oil (CPO), and palmolein oil all saw a decrease in value. Meanwhile, the prices of groundnut oil, soybean oilseeds, and cottonseed oil remained stable.
Market analysts noted a downturn in both the Chicago and Malaysian exchanges, with the Chicago exchange also reporting a decline the previous night. Although wholesale prices for many oils have decreased, retail prices continue to remain elevated. To alleviate consumer burden from rising costs, it is essential to investigate the underlying causes and implement decisive measures.
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Wholesale prices for mustard oilseeds have dropped
Reports indicate that wholesale prices for mustard oilseeds have dropped due to the downturn in foreign markets and the anticipation of an upcoming crop. Additionally, the Cotton Corporation of India (CCI) has once again lowered the price of cottonseed by Rs 50-100 per quintal, which has particularly impacted other oilseeds, including groundnut.
With cotton production on a steady decline and over half of the cottonseed already in the market, there are still eight months until the next crop arrives, suggesting a potential increase in demand for cottonseed. Given this scenario, it would be prudent for CCI to store cottonseed and sell it when market prices are more favorable. Selling at lower prices can negatively affect the overall sentiment in the oilseed market.
The reduction in cottonseed prices has directly influenced groundnut oilseed prices, which have also seen a decline. Since 60-62 percent of cake is derived from groundnut, the drop in cottonseed cake prices has further complicated the already challenging sales of groundnut cake.
Groundnut oil prices have held steady despite a decline in the cost of groundnut oilseeds. According to sources, the drop in the foreign market, coupled with financial difficulties faced by importers, has led them to sell at prices below their import costs, which in turn has caused a decrease in soybean oil prices.
Meanwhile, soybean oilseeds, which were already priced lower, have remained unchanged. The supply of this oilseed has dwindled to around two lakh bags. Additionally, palm and palmolein prices have also seen a downturn due to falling rates in Malaysia and a lack of buyers at the current elevated prices. The winter season, combined with these high prices, has made it challenging to attract buyers for palm and palmolein.