Edible Oil Prices Could Fall By Up To 15% In June, Says Adani Wilmar CEO | Yourstory Buzz

The edible oil price, which has jumped since February due to geopolitical tension and new export ban on Indonesia, can decrease by 15% in June. Speaking to Fe, Angshu Mallick, executive chief and implementing director in Adani Wilmar, said the price had peaked and had to start correcting since next month and so on. Also, Indonesia must revoke the prohibition of exports of palm oil on May 10. “At the end of the June quarter, we will see the correction of the edible oil price. The price must be correct at 10-15%. We have seen the peak, and in June, we will see the market repaired, “he said.

Adani Wilmar took an average price increase of 30-35% in the edible oil segment during the quarter ended March 31. The cost of raw materials consumed in three months until March 2022 rose 40% year to year to RS 13,666 Crore. For the full year that ended in March, the cost of raw materials rose 49% Y-O-Y to RS 48,214 Crore.Mallick said while the Ukraine-Russian war had become a setback, Indonesia banned exports of palm oil suddenly from coming as another blow. “We feel the peak is over. Now, this is a matter of price decline because there is no bad news that must be taken into account, “he said.

According to Mallick, because Indonesia is a palm oil surplus country, it is unable to hold stock for a long time and also lack storage. “They can wait for 7-10 or 15 days, but they have to export because they do not have enough storage to keep oil. I feel that on May 10, it must start exporting and prices must start looking down because there is no other reason left for a higher price, “he said.

India imports more than 55% of oil consumption that can be eaten every year, either in rough or smooth form. Out of imports of India 7.2 million tons (MT) of palm oil every year from Indonesia and Malaysia in 2021-22, 5.4 MT is palm oil.For FY22, Adani Wilmar reported an increase in Y-O-Y 26% in the consolidated net profit to RS 804 Crore. Income from operations grew 46% to RS 54,214 Crore while EBITDA rose 34% to 1,909 CRORE RS.

In FY23, Adani Wilmar hopes that the edible oil can continue to grow in 6-8%, staples and sunbathing food at more than 30% and the industrial essence of 5-6% in terms of volume, while the growth of values will depend on the market. The company also hopes to maintain margins with edible oil prices. “Overall, margin must not go down, it must remain at this level what we have done in Q4,” Mallick said.