Edible oils are among India’s most imported commodities, second only to petroleum and gold. With nearly 60 per cent of the country’s annual consumption of 25 million tonnes shipped in from overseas, the edible oil import bill surged 34 per cent to ₹1.57 lakh crore for the 2021-22 oil year.

Also read: Edible oil import down 23% in Q1 of 2023-24 oil year

The 2022-23 oil year has started on the same note. With the consumption of edible oil expected to rise at two to three per cent per annum, total imports of edible oils by India shot up 25 per cent in the first nine months (November 2022 to July 2023).

As the country strives to meet the needs of its 1.4 billion-strong population, it is herein that a boost to production of Palm Oil locally, which represents 33.4 per cent of total edible oil consumption and 59 per cent of the total edible oil imports, can aid the country and slash the import bill.

Why palm oil?

India is the world’s largest importer and second-largest consumer of palm oil. The commodity accounts for the biggest share of the country’s edible oils import pie, with its appeal owing to its neutral taste profile. This renders it a versatile ingredient for a vast array of applications – from ketchups to shampoos.

Boosting domestic production of palm oil, as a result, is key to paving the way for India to become a food-secure nation, enabling it to wean itself off import shipments and saving the state exchequer millions every year. Beyond its financial implications, the oil palm crop also outperforms other oil-producing counterparts in terms of productivity.

Efficient use of farmland

While the Indian agricultural landscape hosts an array of oil-yielding crops such as rapeseed, soya, rice bran, sunflower, groundnut, mustard, and cotton, they all require a lot more land for a certain amount of oil in comparison to the oil palm’s impressive output.

For instance, as per a study conducted by The International Union for Conservation of Nature’s Red List of Threatened Species, oil palm needs only 0.26 hectares of land to produce a yield of one tonne. In comparison, the rapeseed crop needs 1.25 hectares, sunflower 1.43 hectares, and soyabean 2 hectares to produce the same one-tonne yield.

Thus, with the oil palm crop having the potential to produce 35 per cent of all vegetable oil on less than 10 per cent of the land allocated to other oil crops, this makes the oil palm the ideal crop for India whose agriculture sector is dominated by small landholdings.

Equally, at a time when India’s agricultural fields are under immense strain due to the need for heightened food production amid the challenges of climate change, the oil palm emerges as a beacon of hope. Boosting palm oil cultivation, therefore, offering the prospect of reallocating farmland currently dedicated to other oil-producing crops, thus addressing both the need for more food and the imperative to adapt to a changing climate.

Prosperity potential

Yet another facet in the case of palm oil centres on its potential to catalyse prosperity. For starters, the yields generated by oil palm dwarf those of any other oil crop. The oil palm for instance can yield a staggering four tonnes of oil per hectare, a stark contrast to the 300-500 kg per hectare typically garnered from crops such as rapeseed, soya, rice bran, sunflower, groundnut, mustard, and cotton.

With global demand for vegetable oils set to nearly double from 165 million tonnes currently to 307 million tonnes by 2050, and palm oil expected to meet a significant chunk of this demand, the prosperity potential of the oil palm crop is clearly highlighted.

Its potential to boost prosperity is already evident. Take Andhra Pradesh for example - in this State, select farmers have borne witness to their incomes tripling as they transitioned to palm oil cultivation. This financial upswing isn’t solely attributed to the higher income generated by palm oil, but also to the diversification of revenue streams facilitated by intercropping.

Intercropping advantage

Intercropping, a widely embraced technique on palm oil plantations, involves cultivating an assortment of crops such as cocoa, red ginger, bush pepper, and bananas alongside the oil palm trees. This practice not only enhances soil health but also provides farmers with alternate sources of income, particularly during the initial four-year gestation period before oil palm trees become productive.

Also read: Indian edible oil importers may have wider choice as global soyabean output is set to rise

In essence, the compelling case for augmenting domestic palm oil production encompasses three pivotal dimensions: the potential to drastically reduce India’s food import expenses, the promise of elevating economic prosperity, and the capacity to optimise the utilisation of farmland within the agriculture sector.

In the simplest terms, India’s trajectory towards food security hinges upon the embrace of locally cultivated palm oil. This crucial step not only addresses immediate concerns but also lays the foundation for a more self-reliant and resilient agricultural future.

The author is CEO-Oil Palm Plantation, Godrej Agrovet Limited