Govt probes price hikes, shortage of edible oils

- Post Report, Kathmandu

Apr 6, 2016-

The Department of Supply Management (DoSM) said it had started an investigation into price hikes of essential goods following complaints about a shortage of mustard oil and a rise in the price of sunflower oil. 

Wholesale prices of sunflower oil have jumped by Rs15-20 per litre while retail prices have soared by Rs50-60 per litre. Meanwhile, mustard oil has become scarce in the market.

Gokul Prasad Dhital, director general of the department, said they had asked for an explanation from manufacturers of edible oil. “We have also asked the producers to provide a list of their cost price and maximum retail price,” he said. 

Submitting their clarification to the government, the oil manufacturers said that they had been forced to jack up prices due to a rise in import costs. “A rise in demand and transport costs have pushed up the market price of sunflower oil,” the Nepal Vegetable and Ghee Oil Manufacturers Association said in its statement.

According to the association, sunflower oil is imported from South America. Traders reported that raw material prices had increased in the source countries. “Besides, traders now have to import sunflower oil in small containers which has pushed up the cost,” said Sandip Kumar Agrawal, president of the association.

According to Agrawal, Nepali and Indian traders used to team up to transport sunflower oil in bulk volumes thus reducing costs. “However, Indian importers have scaled down their sunflower business in India due to a fall in demand.” 

Dhital of the DoSM said they would ask the manufacturers again to provide a price list. “In addition, we have asked distributors and dealers to provide details of their stocks,” he said. There are 21 factories manufacturing sunflower oil in Nepal. 

Frequent rises in the price of edible oils had become common following the April 25 earthquake. Mustard oil, that used to cost Rs150 per litre, had soared to more than Rs260. Similarly, sunflower oil had jumped to Rs190 per litre from Rs130. 

After the government intervened, manufacturers rolled back prices to Rs170 and Rs140 per litre respectively. 

Meanwhile, the Association of Nepalese Rice, Oil and Pulses Industry said the 

short supply of mustard oil was due to delays in the import of raw materials. “Shipments of raw materials were affected following the Indian trade embargo, leading to a short supply in the domestic market,” the association said in its clarification to the DoSM. 

There are 350 mills producing mustard oil in Nepal. Only 10 percent of their raw materials are sourced locally while the rest are imported from India and third countries. 

Published: 06-04-2016 08:24

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