Edible oil imports may increase to 4.8 mt

The country's total vegetable oil imports are estimated at 4.7-4.8 million tonnes for the oil year ending October 2007.

This was projected by B V Mehta, executive director of the Solvent Extractors' Association (SEA) of India in a paper presented at AACREA Conference in Argentina recently.

Between November 2006 and July 2007, total imports were recorded at 3.30 million tonnes, 8 per cent more than the year-ago period's imports of 2.23 million tonnes of palm products and 1.07 million tonnes of soft oils. The paper suggests that the quantum of imports is likely to increase with rising demand keeping pace with the population growth.

India, which imports 40-45 per cent of vegetable oils, mainly from Argentina, Malaysia and Indonesia, consumes 12-12.5 million tonnes of edible oil. If all oils and fat constituents are included in the imports, India would be the third largest importer in the world with 5.4 million tonnes after the European Union (10 million tonnes) and China (8.6 million tonnes).

Even after trade policies were changed in the mid-nineties to increase domestic vegetable oil production, currently at 7-8 million tonnes, it was insufficient to meet the rising demand. Despite an impressive 25-26 million hectares under oilseeds cultivation, the production was characterised by low yields. Domestic price support policies favoured the production of crops, mainly rice and wheat, that competed with oilseeds, the paper further said.

Currently, India accounts for 7.4 per cent of world oilseeds output; 6.1 per cent of world oilmeal production; 3.9 per cent of world oilmeal export; 5.8 per cent of world vegoil production; 11.2 per cent of world vegoil import and 9.3 per cent of the world edible oil consumption.

Oilseeds in India are grown mainly on marginal and sub-marginal lands under low input usage. Moreover, less than 25 per cent of the oilseed area is irrigated, rendering the cultivation vulnerable to weather-related yield risk. This has resulted in slow growth in oilseed production and continued low yields. At about 970 kg/ha, domestic oilseed yield is about half of the world 's average and almost one-thirds of leading producers. The total oilseeds production in India was recorded at 32.8 million tonnes in 2006-07 as compared to 37 million tonnes tonnes.

The $16.5 billion domestic oilseed sector, the fourth largest vegetable oil economy in the world, comprises 15,000 oil mills, 600 solvent extraction units, 250 vanaspati (hydrogenated oil) plants, and over 600 refineries, employing over one million people.