The Centre has shot off instructions to Indian Embassies in countries such as Indonesia, Malaysia and several Latin American nations, to see if more sources of edible oil, including palm oil, soyabean oil and canola, can be tapped. This may be necessary to maintain domestic availability amidst concerns over possible disruption in imports of sunflower oil due to the on-going Russia-Ukraine conflict.
“The high-level inter-ministerial task force studying the economic impact of Russia’s invasion of Ukraine decided that the Ministry of External Affairs should write to its missions in countries that produce prominent varieties of edible oil to see if supplies could be augmented and identify the irritants,” a person tracking the matter told BusinessLine.
India is dependent on imports for meeting over 60 per cent of its domestic edible oil demand with annual imports pegged at around 13 million tonnes. “While India’s import of sunflower oil is a little more than 1.5 million tonne, any gap in supplies can put a further strain on prices that have already been shooting up since the Russia-Ukraine conflict began. That is why it is important to identify alternative sources to fill the gap,” the source said.
For smooth imports, the government may need to address existing import restrictions, including plant quarantine requirements and other procedural norms that slow down clearances, the source said. “With global prices spiraling, the need to bring down import duties on different varieties of edible oil, is another issue to be considered,” he added.
Since the Russia-Ukraine region accounts for over 70 per cent of sunflower and saffola oil globally, a spill over effect of the on-going conflict is already being felt on the prices of other edible oils as well. Traders say that prices of soya bean oil and crude palm oil is already up by about $100 per tonne.
Pan-India average retail prices of groundnut oil, mustard oil, vanaspati, soyabean oil, sunflower oil and palm oil were between ₹137.3 and ₹191.88 per litre in February, as per government figures, and were 10.8-31.7 per cent higher from the levels a year-ago. Commerce & Industry Minister Piyush Goyal met with the edible oil industry earlier this week to review the import situation. “Discussions on importing more of palm oil and soyabean oil also took place ,” an industry official who attended the meeting said.
Indian missions in countries such as Brazil, Argentina, Uruguay, Paraguay, Indonesia and Malaysia can help in supplementing the efforts of traders by helping identify additional sources of supplies that can be contracted. “Since we import palm oil from Malaysia and Indonesia, efforts need to be made to augment supplies from these countries. Soyabean oil is mostly supplied by the South American countries which can also be a source of sunflower oil,” the source said.
India’s annual import of palm oil is around 8 million tonne while its soyabean oil imports are over 3.5 million tonne.