Edible oil intake to rise by 5%

Edible oil consumption in the country is expected to increase by around 4-5 per cent to 12.2 million tonne (mt) this financial year as against 11.7 mt in 2004-05, an Icra report said.

Last year, net availability of edible oil from all domestic sources stood at 7.3 mt and the balance 4.4 mt demand was met through imports.

According to the report, domestic edible oil production is expected to stagnate this year because of consistent production of oilseeds.

As a result, imports are likely to increase to around 5 mt, because of higher domestic consumption. According to the Solvent Extractors' Association of India (SEA), the country's edible oil imports increased to 4.17 mt during November 2004 to August 2005 as against 3.30 mt in the year-ago period.

Palm oil and products are expected to continue to dominate the import market due to their lower prices, logistical advantage, contractual flexibility and consumer acceptance.

Soybean oil remains a secondary source of edible oil. Higher consumer income, combined with lower prices, could result in higher per capita consumption at 11.7 kg per annum in 2005-06 as against 11.6 kg in the last year.

The country's edible oil requirement, for a projected population of 1.25 billion and at a projected per capita consumption of about 15 kg per annum, is expected to be around 19 mt by 2010.

Oilseeds requirement is estimated at 57 mt.

Considering the growth of per capita consumption from a mere 4.5 kg in 1981-82, this would be a major challenge, analysts say. The shortage of oilseeds is expected to result in increased edible oil import.

Domestic oilseeds production is likely to decline this financial year, because of a decline in acreage. Increased application of farm inputs (improved seeds, fertiliser, pesticides, etc.) in response to higher oilseed returns from 2004-05 are expected to increase yields.