Oilseeds Market in India Sees Price Decline Amid Weak Demand
Last week, India’s oilseeds market witnessed a widespread decline in prices despite the ongoing festive season. Wholesale prices of mustard, groundnut, soybean, crude palm oil (CPO), palmolein, and cottonseed oil closed lower across major markets.
Market Pressure Factors
Experts attribute the decline to weak demand, high wholesale prices, and poor trading sentiment. While palm oil prices on the Malaysian Exchange are showing strength due to speculation, cold weather in India reduces domestic demand, as palm oil freezes in low temperatures. This has put additional pressure on palm and palmolein oil prices.
Mustard oil prices are higher than imported refined oils, further weakening demand. The government has also increased import duties, with CPO up ₹41 per quintal, palmolein ₹107, and soybean degum oil ₹21 per quintal. Additionally, the minimum support price (MSP) for the upcoming Rabi oilseed crops has been raised.
Impact of Currency and Stockholding
The weaker rupee against the dollar has made imports more expensive, adding to market pressure. Farmers and stockists are holding the mustard crop, leading to increased selling and a consequent drop in prices. Over the past two months, wholesale mustard oil prices have fallen by approximately ₹20–22 per kg, though retail prices remain relatively stable, raising concerns about market transparency.
Other Oilseed Price Movements
Prices of soybean, peanut, and cottonseed oils also declined due to weak demand and a drop in exports. Analysts suggest that while the oilseeds market remains volatile for the time being, demand is expected to improve after the festive season.
The market continues to reflect a complex interplay of domestic demand, import policies, and international price movements, keeping traders and consumers closely monitoring trends.
