Despite higher production of vegetable oils, India still likely to import 133 lakh tonnes of veg oils this year

India produced 93.18 lakh tonnes of vegetable oils in 2020-21 (November-October), as against 85.38 lakh tonnes and 76.87 lakh tonnes in the previous two years. But despite this record output, the industry body Solvent Extractors’ Association of India estimates the country will end up importing some 133 lakh tonnes, from the 155.49 lakh tonnes of the 2018-19 oil year.

India imports anywhere from nearly 60 per cent to over two-thirds of its vegetable oil requirement, depending on how good the rains are, entailing an annual foreign exchange outgo of $10-11 billion. The Prime Minister’s new National Mission on Edible Oils-Oil Palm aims at increasing the total area under oil palm from the current 3.5 lakh hectares to 10 lakh hectares by 2025-26. Growers would be entitled to a minimum “viability price” for their fresh fruit bunches (FFB) production, which is 14.3 per cent of the last five-year-average crude palm oil (CPO) price adjusted for wholesale inflation.

The focus on palm oil is not misplaced as it is a crop that can yield 20-25 tonnes of FFBs per hectare, translating into 4-5 tonnes of Crude Palm Oil (CPO). No other oilseed yields such outputs: Mustard and groundnut yields aren’t more than 2-3 tonne per hectare and the oil recovery from that only at 35-40 per cent. Any reduction of import dependence in edible oils can only be achieved through increasing domestic production of palm oil. Out of India’s annual 130-150 lakh tonnes vegetable oil imports, 80-90 lakh tonnes is accounted for by palm oil alone.

However, valid concerns are being raised over introducing oil palm in tropical rainforests or biodiversity-rich areas such as the Andaman & Nicobar Islands and the Northeast. The crop is probably better suited for states such as Andhra Pradesh, Tamil Nadu, Karnataka and Odisha, where it can replace paddy and be grown using drip irrigation, mulching and other water-saving practices. The focus for now is on the states already cultivating oil palm. An assured “viability price”, protecting against fluctuations in global edible oil markets, should go a large way in instilling confidence in farmers of these states. 

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