As the monsoon is soon coming to India, none of us can miss out on those pakodas in the rain. Not just the pakodas but every Indian household resonates with their fried dishes. But this time, you might have to cut them down a bit. The prices of edible oil in India have been skyrocketing for almost a year. So, all those cravings you’re having should better take the back seat for now.
From where does India get its edible oil?
Edible oil is a primary ingredient in Indian cooking. You cannot imagine cooking any of the delicious dishes without any oil. India’s major edible oil types are Vanaspati, Palm oil, Soya, Mustard, and groundnut. But, even after the heavy dependency on this ingredient, 65% of the demand relies on imports. The significant dependence on imports makes the supply susceptible to changes due to conditions of the international market. For example, a change in crop production in Malaysia can affect India’s prices of edible oil. India gets its edible oil from these major producers: Russia, Ukraine, Indonesia, Argentina, and Malaysia.
What’s the reason behind the spike?
The prices of edible oils in India have spiked up by 62% compared to the past year. It is primarily because of the weather conditions in the major exporting countries. Let’s go over the reasons for this spike:
- Labour Shortage: Palm oil comprises 60% of the imports of edible oils. Due to the labour shortage in Malaysia and increased local demand in Indonesia, exports have come down. It reflects the increase of price from ₹85 in May 2020 to ₹138 (per kg) currently.
- Dry Spell: 85% of the supply for soybean oil comes from Brazil and Argentina. However, with dry weather in Argentina, the largest exporter, the manufacturing has tumbled.. The prices have increased to ₹155 from ₹100 per kg due to these conditions.
- Drought: Another major commodity, sunflower oil, is majorly imported from Russia and Ukraine. However, with drought-like conditions in these countries, the production has taken a plunge. The change is seen in the Indian prices, rising to ₹175 from ₹110 per kg.
- Higher Demand: Mustard oil is also witnessing a steep increase in its price due to higher local demand. The reasons seems to be the lockdown and the increase in the prices of other edible oils, inducing consumers to shift to Mustard. It took the prices from ₹115 to ₹170 per kg.
The Road Ahead: Will your dream of eating pakodas come true?
Recently, the government mentioned the availability of edible oil stock at Kandla and Mundra ports in India. It is primarily due to testing and clearances as a part of the Covid-19 protocol. The government hopes for a decrease in prices after the release of the stock. Also, a cut in the basic customs duty to 10% for crude palm oil and to 37.5% for refined palm oil by the government will help cool off the prices.
The situation currently looks bleak with the increasing prices; however, there is hope as the international supply is bound to jump back. Until then, India needs to work on increasing the local production to meet the demand. It will help reduce the dependence on international factors and provide a steady supply of edible oils to the Indian population.
P.S: If you are making pakodas, feel free to invite us!