Agri Business

Inter-cropping with tea plantations seen as way ahead for oil palm cultivation

Rutam Vora Ahmedabad | Updated on June 29, 2020 Published on June 26, 2020

Shatadru Chattopadhyay, MD, Solidaridad Network Asia

Experts discuss future of palm in India considering heavy dependence on imports

What is seen as an answer to ensure India’s self-sufficiency in oil palm cultivation is inter-cropping of oil palm with tea plantations. Experts believe that considering the heavy dependence of imports to meet India’s palm oil requirements, a possible way out could be engaging with tea planters and encourage inter-cropping.

At a webinar on ‘Future of Palm in India’, Shatadru Chattopadhyay, MD of Solidaridad Network Asia Ltd, informed that there is good potential for oil palm cultivation in the North-East region among tea plantations.

“Apart from the oil industry, we are seeing good opportunity to engage with tea plantation sector to boost oil palm cultivation. There is a need to explore inter-cropping possibilities for oil palm in tea plantation areas,” Chattopadhyay said at the webinar, jointly organised by the Solvent Extractors’ Association of India (SEA) and Globoil India on Friday.

Per an estimate, the North-East region has nearly 2,80,000 hectares of land potential for oil palm plantations. Currently, only 30,000 hectares are under oil palm plantation. The need to increase domestic oil palm cultivation is gaining momentum as vegoil imports is draining huge forex reserves. Last year, India imported around 9.5 million tonnes of palm oil and derivatives worth ₹77,000 crore.

Experts discussed about the potential for oil palm cultivation in India, which currently grows oil palm on about 3.3 lakh hectares of area as against the potential of 19 lakh hectares. India’s current crude palm oil production is estimated at 2.8 lakh tonnes.

Water guzzlers

Nasim Ali, CEO, Oil Palm Plantation, Godrej Agrovet Ltd, commented that farmers need to make rational choice of a crop considering over 60 per cent of irrigated water source is being used for paddy and sugarcane cultivation in India.

“Its a paradox that crops like sugarcane are being cultivated, where water depletion is happening. We need to switch to sustainable crops such as oil palm,” Ali said adding that a major deterrant for farmers to take up the oil palm cultivation is the long gestation period.

Improving R&D

Commenting on the way ahead for India, Sandeep Bhan, COO, Sime Darby Oils, Malaysia, informed that India should increase business-to-business engagement with Malaysia and Indonesia and outsource innovations through R&D in these countries. “The perception about palm oil needs to be changed. Also need to create awareness on the nutritional benefits of palm oil,” Bhan said adding that it is time India started focusing on speciality chemical segment as downstream product segments from palm oils.

Anghsu Mallick, Deputy CEO at Adani Wilmar, highlighted marketing challenges in promoting palm oil usage in India. “There are several benefits of palmolein which needs to be highlighted. Campaigns should be rolled out to create awareness about the category and businesses should focus on rural activation,” said Mallick.

The market analysis showed that of the total palmolein consumption, 71 per cent is from rural households. Also, it shows that 86 per cent households are non-vegetarian households. “For processors there is an opportunity to create a niche segment for cheaper cooking and frying medium for household consumption,” Mallick stated.

Currently, India’s palm oil consumption is 33 per cent or 3 million tonnes of total 9 million tonnes is from Hotels, Restaurants and Cafe segments (HORECA), 18 per cent or 1.6 million tonnes by household, bakery and biscuit each, while non-food consumption is 13 per cent or about 1.2 million tonnes.

Outlook

On the current Covid impact on palm oil and the future outlook, Dorab Mistry, Director, Godrej International, Singapore, commented that commodities are gripped into a rough time at present and prices will go back to the level of cost of production.

“In the mean time, the recovery that we have seen is partly due to huge stimulus packages administered in the world economy by various nations. But the stimulus will not continue for long. Post July, we may see recessionary tendency and shrinkage of economies. Between now and first quarter of 2021, we have to live with low prices,” Mistry said adding that Asian countries hold a good outlook and there is a possibility of strong recovery in 2020-21.

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Published on June 26, 2020
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