India: Edible oil crisis

An edible oil crisis is around the corner though policy planners do not seem to realise this. The oilseed production has dropped this year by a whopping 17 per cent to 23.26 million tonnes, falling below 24.38 million tonne harvested a decade ago in 1996-97. The dependence on imports for meeting the needs, which was a mere 3 per cent in the early 1990s, has shot up to over 40 per cent. What adds to the worry is that the edible oil availability in the international market is likely to dwindle due to the large scale diversion of these oils to bio-fuel production. This may make it difficult even to import enough edible oils.

The Solvent Extractors’ Association of India, an apex body of the vegetable oil trade, has brought out a ‘white paper’ on the status of the oilseed sector, cautioning the government over the impending crisis. It has pointed out that the biofuel manufacturing capacities have expanded substantially the world over. While soyabean oil is being used for producing biofuel in the US, rapeseed oil is used for that purpose in the European Union as is palm oil in Malaysia and Indonesia. “We fear that we may not be able to control the landed cost of imported oils even by bringing the duties to zero level in the coming years,” the white paper has stated.

Business Standard