Approach:
- Intro – mention stats on India’s edible oil imports.
- Give reasons why & how India can have self-reliance in edible oils.
- Conclusion.
India’s edible oil import bill in FY 2022 has crossed $19 billion for more than 14 million metric tonnes of imports. Its import dependence on edible oil stands at 55-60% of the total consumption. Indian agriculture is largely competitive – but its biggest Agri-import item, edible oils account for 59% of the total agri-imports. This is despite the very high import duties on its imports. Of edible oil imports, more than half is palm oil, followed by soyabean & sunflower.
This “excessive dependence” on edible oil imports has raised the pitch for ‘aatmanirbharata’ and accordingly, the National Edible Oil Mission – Oil Palm was launched in 2021. To achieve self-reliance in edible oils through traditional oilseeds like mustard, groundnut, soya, etc., India will require an additional 39 million ha under oilseeds to replace the 14 mmt of import fully. This is because, the existing oilseeds yields roughly 360 kg of oil/ha. This required area can’t be made available without reducing the area under cereals, thus endangering food security. So, to reduce the edible-oil import dependence, a rational option is developing oil palm at home and ensuring high productivity.
India has identified 2.8 million ha suitable for oil palm. The objective of NEOM-OP is to bring at least 1 million ha under oil palm by 2025-26. Given the international surge in edible oil prices by more than 70%, time is ripe for India to ramp up efforts in developing oil palm. Oil palm is a long-gestation crop needing 4-6 years, during which small-holders need to be supported.
Besides raising area under oil palm, the processing industry must ensure an oil recovery of at-least 18-20% which must be built into the pricing formula. Another option is to declare oil palm as a plantation crop to allow corporate players to own/lease land on long-term basis to develop their own plantations & processing units. Unless India thinks holistically and adopts a long-term vision, chances of reducing its import form 14 mmt (FY22) to 7 mmt by FY27 looks bleak.