Cooking oils are getting cheaper but healthier options are as pricier as they were

• When the government slashed import duties on palm, sunflower and soyabean oils earlier this month, it left out healthy edible oils such as olive and olive pomace oil.
• These duties cuts have altered the price gap that exists between healthy and unhealthy oil options.
• Healthy oil manufacturers like Modi Naturals and Marico are bearing the brunt of hefty import duties and passing it on to consumers.
• Indians have already been downtrading from brands to unbranded or local items when it comes to packaged foods, now there will be a similar trend in edible oil too.

Indian households have been reeling under the stress of hikes in edible oil for months – a key element that determines their thalinomics. This heavily imported food product has been hit by supply chain issues, export bans and more but just as a few weeks back, they had started to cool off a bit, thanks to global price drop.

A few companies like Adani Wilmar had reduced the sticker price too. The centre too moved to make it affordable again by slashing import duties and asked the manufacturers to pass it on to consumers by up to ₹10-12 per litre.

These duty cuts will also offset the fall in rupee value that will affect the economics of imported products. India is highly dependent on oilseeds growers outside the country as it is the world's second-largest consumer and number one importer of vegetable oil. It meets 55-60% of its needs through imports.

“Since the global edible oil prices have reduced by 25-30% and the Indian government has also reduced the import duty on edible oils, the rupee depreciation against dollar and its impact on local prices will be offset by that. Hence, we don't see the price hike in edible oils in India due to rising dollar against rupee,” Akshay Modi, MD of Modi Naturals’ told Business Insider India.

According to recently released data by the Ministry of Statistics and Programme Implementation, edible oil prices are over 9% higher than they were last year. After vegetables and spices, oils and fats have seen the biggest increase in the inflation rate during the same period.

Healthy vs unhealthy

While these duty cuts helped, they have also altered the price gap that exists between healthy and unhealthy oil options. Duty cuts were taken by the government for palm, sunflower and soyabean, and the centre has left out olive and olive pomace oil, both of which are imported too. These two oils are considered the healthiest of the old due to their antioxidant properties.

“When it comes to other healthy edible oils like rice bran and olive pomace oils, the duties are still disproportionately high at 38.5%, leaving consumers with no healthy options to choose from. We urge the government to reduce the duty on crude oils of these sources, make it a level playing field and give consumers healthy options to choose from,” Modi told Business Insider India.

Manufacturer of Oleev oil Modi Naturals’ five-liter olive pomace currently costs ₹2199. Dhara’s sunflower oil, on the other hand, costs ₹943 for 5 liters. The price of olive oil is already high and disproportionate duties might make them costlier by comparison.

As trends indicate, Indians have already been downtrading from brands to unbranded or local items when it comes to packaged foods. And, it has already affected FMCG major Marico. Its healthy cooking oil brand version Saffola declined in double digits in the quarter ending June 2022.

“Saffola Oils declined in double digits, having to contend with high in-home consumption in the base quarter and significant downtrading visible from super premium to mass segment in edible oils,” the company said in a statement to the stock exchanges.

Marico has a range of healthy cooking oil options under its brands named Weight Watchers, Total Pro Heart and more. It also has cans of rice bran oil with other vegetable oils, providing a multitude of options for consumers searching for healthy options.