End of the year. A consumer-oriented trend was clearly visible in the Vegoil sector: the head of the IVPA

In 2023, important developments occurred in the edible oil industry. President of IVPA (Indian Vegetable Oil Producers Association) Sudhakar Desai looks back to 2023 industry developments related to this line of business.

What was the year 2023 like in the vegetable oil industry?

In 2023, a clear consumer-oriented trend was visible in the vegetable oils sector, which was characterized by a significant, 35-40 percent price drop of various oils. This decline was due to the global abundance of palm and sunflower oils. The industry had an unfavorable year characterized by increased volatility and a continued downward trend in prices.

How did the market price behave during the year?

The vegetable oil market saw a stabilizing effect from palm and sunflower oil in 2023, acting as a price anchor in the global arena. In India, the mustard crop remained below the MSP, but a strategic move by the government involving the purchase and storage of 1.5 million tonnes successfully pushed prices above the MSP threshold. The strong domestic supply and demand dynamics of food excludes the need to import soybean meal compared to the previous year.

What is the price forecast for 2024?

World market prices have now reached a consolidation point low enough to stimulate increased demand over the next 5-6 months. Assuming a turnaround, prices will rise by around 10-15 percent by March-April 2024 when pressure on palms and production will ease, which in turn will help mustard seed prices during next season’s harvest.

What suggestions would you like to make to the government to promote the growth of the vegetable oil industry in India?

Our recommendations continue in three main ways, such as the introduction of a dynamic tariff system where tariffs automatically adjust to global volatility. We support government intervention to increase the tariff differential between importing palm and raw palm products. The current reduced gap has resulted in excess supply of refined olein, which is adversely affecting the domestic industry.

Leave a Reply

Your email address will not be published. Required fields are marked *