Edible oil production not in sync with growth in consumption 

The domestic edible oil production has not been able to keep pace with the growth in consumption and the country is incurring heavy costs owing to its dependence on imports. Import growth in edible oils during the last decades is about 174 per cent. The ongoing Russia-Ukraine war has once again highlighted that India needs to be self-sufficient in edible oils.  

Last month (February 2022), India reported import of 1,019,997 tonnes of vegetable oils including 983,608 tonnes of edible oils and 36,389 tonnes of non-edible oils. The import of vegetable oils went up by 22 per cent compared with February 2021 when India imported 838,607 tonnes of vegetable oils.   

India imports about 175,000-200,000 tonnes of sunflower oil per month and the conflict between Russia and Ukraine has disturbed the sunflower oil supply. Just 152,000 tonnes arrived in India in February 2022 and the supplies could dry up if the war escalates. 

According to Solvent Extractors’ Association (SEA), the announcement by Indonesia to increase the limit of domestic sales from 20 per cent to 30 per cent will further reduce the Indonesian export volume and tighten global export supplies. These two factors have led to high volatility in the last few days in the edible oil prices in the international market, says SEA. 

Indonesia and Malaysia are major suppliers of palm oil to India and the country depends on Argentina, Brazil, and other countries including Ukraine and Russia for edible oils. The Russia-Ukraine conflict or any other conflict in the world has a direct impact on India’s edible oil prices 

Vegoil dependency costs heavily 

The Ministry of Consumer Affairs admits that domestic production of edible oils is unable to meet domestic demand. The domestic consumption of edible oils is around 250 lakh tonnes, while the domestic production is only 111.6 lakh tonnes. The gap between demand and supply of edible oils is about 56 per cent and is met through imports. 

The Ministry of Agriculture data shows that India is the largest importer of vegetable oils in the world followed by China and USA. Of all the imported edible oils, the share of palm oil is about 60 per cent followed by soyabean oil with a share of 25 per cent and sunflower at 12 per cent.

The import figure of edible oils during 2019-20 reveals that India imported a total of 13.35 million tonnes of vegetable oils costing ₹61,559 crore. The per capita consumption is around 19-19.80 kg per person per annum over the last five years. Domestic edible oil production has not been able to keep pace with the growth in consumption, the Ministry has admitted in its latest annual report. 

Government’s Plan 

According to the Ministry of Commerce and Industry, the government is implementing the National Food Security Mission (NFSM) – Oilseeds and Oil Palm to increase the production and productivity of oilseed crops and area expansion of oil palm in the country. The objective is to increase edible oil production. Under the Mission, various interventions such as improved seed replacement, increased seed production, large-scale demonstrations, supply of critical inputs, arrangement for life-saving irrigation, mechanisation inputs, post-harvest management and promotion of oilseeds in rice fallow are undertaken.

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