The compulsory use of 25% of domestic edible oils in the production of vanaspati has harden Vanaspati prices. The result was vanaspati prices ruling at Rs. 425 per 15kg in the first week of June spurted to Rs. 485 in just two weeks time, up about 14 %. According to the industry, the recent directive has triggered a higher offtake of domestic edible oils by the vanspati units by 15-20%. Consequently, edible oils too have climbed up. Price variation in edible oils between the first and the third week of the month, are like as. Rice bran oil grade-1 shot up from Rs.16,000 a tonne to Rs 21,000, mustard oil from Rs. 27,000 to Rs. 32,000, refined rapeseed oil from Rs. 25,300 to Rs. 27,000 and RBD Palmolive from Rs. 22,700 to Rs. 25,000. All of them are used in vanaspati. Apart from the demand boost at the domestic level, a 10% hike in the basic customs duty on refined vegetable oils from 25% to 35%, effective from June 12, has also had an impact on vanaspati prices. Due to production shortfall and, the government’s recent ban on import of crude palm oil by vanaspati units, result in price hike. Though there is no bar for importing RBD palm oil, importing the oil at 35% basic customs duty will make them uncompetitive vis-à-vis other vanaspati units which for having captive hydrogen gas plants are allowed to import crude plam oil at 15% basic customs duty. Currently, 150 units, which remain in production, are producing 2 lakh tonnes of vanaspati a year. Of which, according to industry sources, 30% is being produced by units, which outsource hydrogen gas from caustic soda plants as reported by market sources. |
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