Commodities

India should encourage import of oilseeds than meals

G Chandrashekhar Mumbai | Updated on July 23, 2021

Bean import will help utilise the country’s idle processing capacity and provide both meal and oil

The suggestion to allow import of soyameal to augment the availability of feed in the domestic market and contain prices deserves to be considered by the government.

Soyameal prices have nearly doubled from the levels seen late year, hurting the feed industry.

It is pertinent that prices of the raw material soyabean, too, have shown a similar price trend during the period which is reflected in the soyameal rates. This extraordinary spurt in bean and meal rates is despite the government’s claim of a record soyabean harvest of 135 lakh tonnes (lt) during 2020-21.

Of course, private trade has serious reservations about the official production number and has estimated it substantially lower at 105 lt.

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So the real question is whether prices have been driven by a combination of lower domestic production and bullish global factors or is there something more to the price behaviour than meets the eye. Obviously, it cannot be dismissed as a matter of conjecture; the trade bodies must get to the bottom of the issue and come up with specific findings as it has deeper significance for the country’s oilseed sector.

Interestingly, while asking the government to allow soyameal import for a short period (till September), the Solvent Extractors’ Association (SEA) has said even import of soyameal from genetically modified soyabean may be permitted given the fact that such meal is available at relatively low rates in the international market. The Centre’s antipathy or prejudice — without solid science-based evidence — against technology seeds is, of course, well-known.

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Seed technology

While SEA must be complimented for the practical and progressive recommendation to allow soyameal import albeit for a short period, the trade body must demonstrate courage and conviction to demand more liberal import of the bean itself instead of the meal as part of trade policy. Bean import will help utilise the country’s idle processing capacity and provide both meal and oil.

In the absence of a breakthrough in seed technology, the country’s domestic soyabean production seems to have got trapped in the 100-120 lt range. Unregulated import of vegetable oils, including soya oil, chokes domestic oilseeds production. In a business-as-usual scenario, expanding demand is sure to tighten the availability of raw material in the years ahead.

India is already the world’s largest producer of cotton (360 lakh bales) and cottonseed (100 lakh tonnes), over 90 per cent of which is genetically modified. There is no scientific recorded evidence of any major adverse consequence of cultivating and consuming the crop. As a feed crop, soyabean is no different.

Policy shift needed

For the policymakers, SEA’s soyameal import suggestion must raise a larger issue. It is about the desirability of continued large-scale import of finished product – vegetable oil. Over the years, this policy has directly affected the country’s oilseed crushing and solvent extraction industry.

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India should encourage import of raw material (oilseeds like soybean, rapeseed) at least as partial replacement of vegetable oil. The import policy for oilseeds, including GM seeds, should be unrestricted; but actual imports should be strictly monitored.

Such a move would revive the oil milling and solvent extraction industry, help generate jobs and incomes, and provide the much needed meal and oil for the country.

The author is a policy commentator and agribusiness specialist. Views are personal.

Published on July 23, 2021

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