Edible oil prices simmer in Karnataka as Ukraine war rages on

Far away from war-torn Ukraine, homes across Karnataka are bracing for the impact of the February 24 Russian invasion of that country.

Published: 13th March 2022 05:14 AM  |   Last Updated: 13th March 2022 05:14 AM   |  A+A-

soyabean oil, cooking oil

Image used for representational purpose only. (File Photo)

Express News Service

Far away from war-torn Ukraine, homes across Karnataka are bracing for the impact of the February 24 Russian invasion of that country. The common folks’ household budget is affected due to a feared shortage of edible oil, as they try to stock up. Fuel prices may also go up, forcing people to look for mobility alternatives.

In fact, the possible impact can be gauged more from people’s reaction to prices and supply of edible oil, especially the most commonly used sunflower oil, 70 per cent of which is imported from Ukraine and 20 per cent from Russia.

“I normally buy a five-litre can of oil, but now, since there are signs of availability being impacted, I have bought three such cans and hope that will last at least a year. The menu is also being thought of carefully. Frying of pakodas, poori and other items requiring oil is now being cut down,” says Rekha B, a resident of Sarjapura.

A reality check across grocery stores in Davanagere and Chitradurga highlighted severe scarcity of sunflower oil. A person familiar with the trade said that major suppliers of edible oil in India are withdrawing stocks from the market while anticipating a hike in prices, due to which an artificial scarcity is being created.

The price of sunflower oil, which was Rs 141 per litre on February 24 — the day the war broke-out — is now Rs 186 in the wholesale market and Rs 195 in the retail market. Except the packaged oil from the co-operative Karnataka Oil Federation, no other brands of oils are available in the market. Groundnut oil, which was selling at Rs 160 per litre on February 23, is now sold at Rs 184 per litre. However, there is no change in the prices of the palmolein, coconut, olive oil and other cooking oils.

Those involved in oil repacking told The New Sunday Express that if the war continues for days on end, there will be severe scarcity of edible oil in the market and lead to an increase in palmolein oil imports from South-East Asian countries.

But there is a problem here too. D D Prahalad, Joint Secretary, Bengaluru Oils and Oil Seeds Association, says the cost of palmolein oil has increased because of reduced stocks in Malaysia and Indonesia. Both countries announced 25 per cent of palmolein oil to be used as biodiesel and prices have started to rise. He says prices of edible oils have been rising since the last one and half months, made worse now by the war.

Commercial Officer, Karnataka Oil Federation, Mahanandi, says, “The refineries which were supplying us the oil have informed us that there is no supply and once the contract ends, the supply will be stopped.”

Shree Govind of Sangameshwara Store in Chitradurga, says, “One litre, two litre and five litre cans supplied by Karnataka Oil Federation are available, but 15-litre cans are not. We are selling one litre cans at Rs 195 per litre, that too having an MRP of Rs 210 on it. During Shivaratri, too, we sold oil at Rs 140 per litre, now prices have skyrocketed.”

Although there is no visible panic among buyers in Manipal, Roopalatha, a homemaker, says it is giving a window for traders to hoard the commodity and then charge higher prices. “Officials should keep an eye on these aspects now before things go out of hand.”

Food & Civil Supplies Department Joint Director Manteswamy says his department, along with Department of Legal Metrology, is keeping a close watch on edible oil sales in the market. “In case of complaints of hoarding, blackmarketing or selling the product above the market price, we will initiate legal proceedings. We will ensure smooth sales of oil in the market,” he says.

FUEL PRICE FEARS
There is already a noticeable surge in motorists lining up at fuel stations. Karnataka Petroleum Dealers’ Association president Balaji Rao says the price of crude oil has already increased to $130 per barrel. “In the coming days, the price of petrol and diesel will rise by Rs 10-20 per litre, but it will not happen suddenly, it will be a gradual rise, like 60 paise and then Re 1 and so on. People are filling up their tanks and moving around, but the question is how long will that last. There is sufficient fuel as of now, and there is no need to worry. But when the prices go up, there will be no alternative.”

He says switching over to electric vehicles is not easy and cannot happen quickly. Also, public transport is not very good across the state, except in some urban centres, which makes it difficult for everyone to switch immediately.

But, even as Rao says the adverse impact will not be felt right away, people like Bheemappa Krishnamurthy, a resident of HSR Layout, have already started using alternatives. “I have started to use two or three modes of transport to reach my work place instead of usually riding or driving. I now take the Metro and then a bus to reach office which is after Baiyappanahalli Metro Station. But this alternative has also now started to pinch my pocket and I have already surpassed my monthly expenses for March,” he rues.

Dakshina Kannada and Udupi District Petrol Vendors’ Association president P Vaman Pai says so far, there is no impact on fuel prices. “We are expecting it to increase as Assembly polls in five states have ended. But, in India, we have sufficient stocks of fuel for at least a year. There are over 15 underground fuel storage facilities with a capacity of crores of metric tonnes, and even Russia is ready to help India in supplying fuel.”

He says price of fuel will go up during weekends and may increase overall by just Rs 5.

How the war impacts edible oil supply/prices

India imports 90% of its sunflower oil from Ukraine and Russia

The ongoing war has cut supply chains, leading to shortage 

Palmolein oil from Indonesia and Malaysia is getting dearer as some of it is diverted to produce biodiesel.

Wholesalers withdrawing available stocks to further create scarcity.

Foreseeing severe scarcity, people stocking up at current prices, further causing scarcity and price hike.

HOW WAR IMPACTS FUEL PRICES

US banned Russian oil and gas imports after latter invaded Ukraine

Crude oil prices have started soaring

US banned Russian oil and gas imports after latter invaded Ukraine

Oil companies look at raising prices to accom-modate costs as well as profits 

Polls in six Indian states prevented prices from being raised; Now, oil companies are likely to hike prices if retailers’ cut is to be ensured

Petrol/diesel likely to go up by up to Rs 20 per litre.

(With inputs from Bosky Khanna in Bengaluru, G Subhash Chandra in Davanagere/Chitradurga, Mallikarjun Hiremath in Dharwad, Prakash Samaga in Udupi, Raghu Koppar in Gadag, Tushar Majukar in Belagavi, Divya Cutinho in Mangaluru, Mahesh Goudar in Bagalkot/Vijayapura & Udaya Kumar B R on Hassan)



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