New Delhi, July 23 -- The Reserve Bank of India (RBI) has linked the recent broad-based rise in edible oil prices to the growing diversion of edible oils for biofuel production, citing Indonesia's decision to raise its mandatory palm oil biodiesel blending from 40% to 50% as a key factor in its assessment.

In the July edition of its State of the Economy report, published in the RBI Bulletin on 22 July, the central bank said prices of key food items recorded broad-based sequential increases through 20 July.

While rice and wheat prices firmed up and the pace of increase in pulses moderated, edible oil prices "continued to show a broad-based increase amidst use of edible oils for biofuel production". A footnote accompanying the observation...