Edible oil prices are expected to remain stable during the upcoming festive season, according to executives from leading fast-moving consumer goods (FMCG) companies. Despite concerns about moisture stress affecting the soya bean crop in India, prices are unlikely to rise significantly due to ample international supply. However, consumers should be prepared for a possible price hike in edible oils from December through April-May next year, as the effects of El Nino in oil-producing nations start to impact the market.
One area of concern for FMCG companies is rice production, particularly in eastern states that produce non-basmati rice. These regions have experienced inadequate rainfall, which may harm the standing paddy crops in the fields. BV Mehta, executive director of the Solvent Extractors Association, emphasized the critical role of monsoon rains for soya bean and groundnut crops, expressing concerns about the potential yield impact if there is not adequate rainfall in the next 10 days.
The India Meteorological Department reported that 287 out of 717 districts in the country experienced deficient rainfall between June 1 and August 4, adding to worries about crop outcomes.
Despite these challenges, the executives are optimistic about the near-term outlook for edible oil prices in India. "India is sitting on a good volume of imported oil, and prices are unlikely to go up soon," stated Angshu Mallick, managing director of Adani Wilmar. However, he also noted that the scanty monsoon could have repercussions on the soya bean crop, which might ultimately affect consumption.
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