Agri Business

Clamour for import curbs on edible oils gets louder

Rutam Vora Ahmedabad | Updated on August 17, 2020

Groundnut oil body SOMA writes to PM seeking quantitative restrictions

Amid brightened prospects for a bumper oilseeds harvest this year, the demand for curbs on imports of edible oils are on the rise.

The groundnut oil crushers and trade body, Saurashtra Oil Mills Association (SOMA) has written a letter to the Prime Minister Narendra Modi seeking quantitative restrictions on import of edible oils to protect interests of oilseed growers and local crushers.

Such demands assume signficance as the country is looking to achieve the goal of ‘Atmanirbhar’ (self-reliance) in oilseeds sector.

Highlighting the dwindling prices for the oilseed, groundnut oil body stated that while sowing data for groundnut and other oilseeds including soyabean, sunflower, safflower has been encouraging and may lead to a bumper crop this kharif season, there is a need for protection against imports of edible oils. “In coming months, the availability of domestic edible oils is likely to go up. So, curtailing imports of edible oils has become inevitable,” Sameer Shah, President, SOMA, wrote in the letter dated August 17.

Recently Soyabean Oilseed Processors Association had demanded such curbs on imports.

India is import-dependent to meet its nearly 22 million tonnes of annual edible oil demand, of which nearly 70 per cent or 15 million tonnes (including 9 million tonnes of palm oil) is met through imports costing over ₹80,000 crore annually.

But the sowing data shows huge oilseed cultivation has taken place during current kharif season 2020. It has reached 187.1 lakh hectares as on August 14, up nearly 15 per cent from 163.5 lakh hectares recorded last year. The sowing is under progress at several pockets.

Groundnut acreage in Gujarat — the largest grower of the oilseed — has reached historic high levels at 20.50 lakh hectares, about 32 per cent higher than the normal acreage. Nationally, groundnut acreage has touched 49.34 lakh hectares, up 41 per cent over last year. The sharp surge in oilseeds cultivation is a fallout of better prices last year and government’s push for self-reliance in the oilseeds sector. But at a time, when bulk consuming sectors such as restaurants, hotels and event organisers remain affected due to Covid-19-induced lockdown, the continued imports of edible oils is causing a glut situation, thereby discouraging the growers with reduced oilseed prices. Groundnut prices have fallen from ₹6,200 per quintal to ₹5,300 per quintal since the lockdown. “This is very damaging to our farmers,” Shah said.

Of the total, about 22 million tonnes of edible oil consumption in India, 43 per cent is palm oil, 21per cent soybean, 16 per cent sunflower oil, 4 percent mustard oil and Other oils 16 per cent. India produces about 7.3 million tonnes of veg oils domestically, of which 35 per cent is rapeseed oil, 21 per cent is soybean oil, 1 per cent is sunflower oil and 43 per cent is others including groundnut oil, sesame seed oils etc.

Protection from imports will further brighten the prospects for domestically grown oilseeds including soybean, sunflower, groundnut and sesame seed.

But there is another section of edible oil trade, the solvent players and importers led by the Solvent Extractors’ Association of India (SEA) who had raised strong objection to the idea of quantitative restrictions expressing fears of corruption and administrative issues in handling the quota system.

Published on August 17, 2020

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