India’s edible oil demand is estimated to be in the range of 28-29 million tonnes (mt) by 2027-28, according to Solvent Extractors’ Association (SEA) of India.

Speaking at the ‘International Sunflower Seed and Oil Conference’ in Argentina, BV Mehta, Executive Director of SEA, said India’s edible oil consumption has been projected at 23.8 mt during 2022-23.

Stating that Covid pandemic and high prices squeezed the demand for the edible oil by about 1-1.5 mt in 2020-21 and 2021-22, he said Indians are now filling up the backlog and are back to celebrating festivals and weddings with full vigour.

“Since businesses and civil life are nearly normal and growth is back on track, I am expecting consumption growth between 2-3 per cent in next five years. With this assumed growth, the demand for edible oils is estimated to be in 28-29 mt range by 2027-28,” he said.

On meeting the edible oil demand of the country, he said the government has targeted oilseed production to increase from current levels of 30 mt to around 38-40 mt. The availability of vegetable oil from primary and secondary sources is projected to increase by 3 mt to around 13.5-14.0 mt by 2025-26. Against this, India’s demand for vegetable oils would be around 26-27 mt by 2025-26. This gap of about 11-12 mt is expected to be bridged through imports.

However, he said, imports may be higher if target production of 40 mt is not achieved as planned.

Palm vs soft oil spread

The quantum and type of oils imports will depend on the price parity and the spread between the palm oil and the soft oils, he said.

On the spread between palm oil and soft oils, Mehta said India imported a record quantity of palm oil in the first four months of current oil year 2022-23 (November-October), as the spread between soft oils and palm oil was nearly $350-400 a tonne during the first quarter of the oil year.

However, now the situation has changed as spread reduced to less than $100 a tonne, attracting larger import of soft oils. He said sunflower oil CIF India price is same that of palm oil in the last one week.

India sources its palm oil requirement from Indonesia, Malaysia and Thailand. As far as soyabean oil is concerned, Argentina is the major supplier. In the case of sunflower oil, Ukraine and Russia are the major suppliers. However, Argentina supplied over 4,00,000 tonnes of sunflower oil during the calendar year 2022 to bridge the supply gap due to reduced supply from Ukraine, he said.

On the outlook for import of edible oils for the oil year 2022-23, he said it would be in the range of 14-14.5 mt due to increase in population and fast rising per capita income and consumption. India imported 14 mt of edible oil during the oil year 2021-22.