According to Mallick, tightening of credit flow to the sector has also resulted in reduction of inventory level in the market.
“No one is keen to hold back stock. They are trying to liquidate it at the earliest so that repayment to the banks does not get affected,” he said.
Palm oil is the most widely consumed edible oil in the country, accounting for nearly 63 per cent of the country’s vegetable oil imports. Last March, the government raised import duty on crude palm oil to 44 per cent from 30 per cent and that on refined palm oil to 54 per cent from 40 per cent. This increase has affected its consumption in the country.
The move reduced the price difference between soya oil and palm oil. While palm oil is available in retail stores at Rs 74-75 per litre, soya oil fetches Rs 77-78 per litre. Although the industry is seeing a 10-15 per cent shift from palm oil to soya oil, consumption of palm oil in the lower stratum of the society may take a hit due to the price rise.