Along with pulses, pressure is building on edible oils as well with significant deficit in Monsoon which will send India’s import of key cooking ingredient soaring to USD 14 billion in the current financial year, an ASSOCHAM study has pointed out.
India imported edible oils worth USD 10 billion in 2014-15, the highest until then as the rains were deficient in the growing states last year as well. However, a new record of edible oils import is going to be made this year as production of oilseeds in Gujarat, Madhya Pradesh, Maharashtra, Andhra Pradesh and Tamil Nadu is expected to drop.
“If we look at and compare the figures for the last five years the vegetable oil imports have reached their highest level in 2014-15. During the same year the country experienced a 12 percent rainfall deficit which resulted in significant decline in domestic oilseed production. The deficit in rainfall so far for the year (2015-16) as per the latest available information is 12 per cent, therefore assuming that the production of oil seeds for 2015-16 remains at the level of 2014-15 and anticipating a rise in demand, vegetable oils imports would reach around USD 14 billion for 2015-16 which was actually around USD 10 billion last year,” the ASSOCHAM study said. These imports were USD 7.2 billion in 2013-14, increasing by over 46 percent in the subsequent year.
It said growth in the domestic production of oilseeds has not been able to keep pace with the increasing demand in the country. Low and unstable yields of most oilseed crops, and uncertainty in returns to investment, which result from the continuing cultivation of oilseeds in rainfed, high risk production environments, are the factors leading to this situation of wide demand-supply gap.
“A vibrant and efficient processing sector is a pre-requisite for the optimum growth and development of oilseed economy. India’s oilseed processing sector has been plagued by a slew of technological and policy issues culminating in the existence of a processing sector low in efficiency and capacity utilisation. If the oilseed cultivators have to be linked in an economically viable and sustainable manner to the oilseed value chain, the role of oilseed processing units cannot be underestimated,”ASSOCHAM Secretary General DS Rawat said.
Farmers mostly cultivate oil seeds on un-irrigated land and needless to say that monsoons play decisive role in the production of oil seeds in these states.Further, uncertainty associated with rain-fed crops, high risk production environments and shifting of land from oilseed cultivation to alternative uses contribute to India’s current state of oil seeds sector.