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India’s 70 per cent import dependency for edible oils cause of concern
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Friday, 01 December, 2017, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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Import of edible oils by India, the largest importer of edible oils in the world, have experienced a massive jump of 45% in the last five years. In fact, since 1993 when oil imports were at 3%, India’s dependence on countries such as Malaysia, Indonesia, the UK, and Argentina has skyrocketed to 70%.
According to the Solvent Extractors’ Association, the edible oil import has cost India Rs 75,000 crore this fiscal. Reportedly, the imports are almost at par with petroleum imports, eating into the country’s forex reserves.
Situation is alarming
Since last year, till October 2017 this year, the imports have gone up by 5%. The situation is alarming as India has to depend on many countries for various types of oils like palm, sunflower and soya to meet the spiralling domestic demand.
And in an event of natural disaster or crop failure, the situation could lead to further erosion in forex reserves by at least 15-20%. Only 5% loss of edible oil production could lead to massive jump in price.
The total import of vegetable oils i.e., edible oil and non-edible oil for the year 2016-17 (Nov.’16 to Oct.’17) is reported at 154.4 lakh tonne compared to 147.4 lakh tonne last year (2015-16) and 106.8 lakh tonne in 2012-13. However, there is no import of vanaspati since last 5 years.
India imported US$7250.06 million worth of vegetable oils in 2013-14.
India imports palm oil from Malaysia and Indonesia, sunflower oil from the UK,and soyabean oil from Argentina. Low productivity is the major issue as Indian production is just half of world average, 1,000 kg per hectare vs 2,200 kg per hectare.
Analysing the scenario, Dr Arpita Mukherjee, professor, Indian Council for Research on International Economic Relations (ICRIER), states, “There is a growing demand for edible oil with rising population and income levels. Our domestic production is falling short of the demand. There is need to do R&D in this sector to increase yield per hectare and have improved variety of seeds. We have to increase the variety of edible oil such as rice bran oil and raise consumer awareness in that area.”
Offering the industry point of view, B V Mehta, executive director, Solvent Extractors’ Association, explains, “We have strongly pleaded to the government to create an “Oilseed Development Fund" out of additional revenue generated from the hike in import duty for increasing the productivity and also pleaded to raise MEIS (Merchandise Exports from India Scheme) benefit for oilseed sector and raise the duty difference between crude and refined vegetable oils from the current level of 10% to 15%.”
The association has also submitted a plan to the Government of India with regard to boosting oilseed production.
Meanwhile, steps are being taken towards this end. S K Pattanayak, secretary, department of agriculture cooperation, Government of India, informs “We are trying to promote palm oil in marginal areas of the country, including Andhra Pradesh, Mizoram and in some other states. We are deficit in oilseeds and working on increasing the production of the oilseeds in the country. we have reached self sufficiency in pulses, oilseeds come next and we are trying our best for which we need to have improved varieties that depend on biotechnological tools for which we are putting our full efforts. Till the time yield increases, there would be some stress.”
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