Agri Business

Oil palm industry for long-term strategy to build local supply

| | Updated on: Nov 01, 2016
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India imports edible oils worth ₹70,000 crore every year. As much as 90 per cent of this is palm oil. This statistic is not something new for those following the edible oil industry. But the industry now worries that the number could swell if the country fails to take a long-term strategy to encourage oil palm plantations wherever possible.

It wanted the Central government to come out with a separate board, separate import policy to protect the domestic industry.

“We must have a long-term strategy and a separate import policy, it is very difficult to protect the local farmers and local producers. You need to have a 25-year policy to develop the domestic industry,” Sanjay Goenka, President of the Oil Palm Developers and Processors Association, told BusinessLine.

Goenka quotes numbers to build an argument. He says palm oil is the cheapest oil in terms of price but nutritionally as good as other edible oils. “If you grow soya, you get 750 kg of oil a hectare. And if you go for sunflower, you will get 800 kg of oil. Compare this with 4.5 tonnes of palm oil a hectare,” he explains.

He, however, says the oil palm area is abysmally low in the country. The total acreage is put at two lakh ha, churning out 1.80 lakh tonnes of oil a year. “This is negligible. India consumes 19.40 million tonnes a year, while we are producing only 8 million tonnes of edible oil,” he points out.

This, he warns, could turn worse if the per capita consumption of edible oil goes up from the present levels of 13-14 kg. “The global per capita consumption is 26 kg and that of the developed countries is up to 40 kg. Even Pakistan consumes more oil (20 kg per capita). If this increases, our requirement would go up sharply,” he points out.

How to plug the gap

Goenka says the present growth rate in acreage is very slow. “Under the present environment, we are adding only 25,000 hectares a year. Compare this with the potential of 25 lakh hectares that country has. We need to recognise the crop as a plantation crop,” he asserts.

What happens if it is declared as a plantation crop? “Companies will be able to aggregate lands suitable for the crop in certain pockets in each State. If it is a plantation crop, it will attract global investors,” he points out.

There, however, is some realisation. Karnataka has declared it as a plantation crop. “Arunachal Pradesh is in the process of doing that. All States must take a cue from this,” he observes.

He appreciates the need for tweaking in the import policy (for the oil from countries like Malasyia). “I agree that you have to keep the interests of the consumers as well. But what the government can do is, it can help out the farmers when the price comes down. Farmers must be protected from the vagaries of the price changes,” he pointed out.

Published on January 15, 2018

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