India doubts possible reduction of dependence on edible oil imports

A sharp drop in global prices for soybean, palm, and sunflower oils and a reduction in duties on edible oils led to an 18% increase in imports. In the period from November 2022 to May 2023, edible oil imports increased by 18% in physical terms.

According to industry sources, this has pushed mustard and soybean prices below the minimum support price (MSP) for the first time in two years, which may discourage farmers from growing oilseeds in the coming seasons. A government official familiar with the trend said the government’s plan to reduce the country’s dependence on edible oil imports from the current level of 56% to 36% in the next three years is in serious jeopardy.

“Low domestic prices for oilseeds may scare farmers away,” the official added.

The situation has also highlighted the apparent conflict between the government’s intention to reduce food inflation and to stimulate domestic production through import substitution.

The government intends to initiate a number of measures, including the use of non-traditional areas for oilseed production, revival of sunflower oil production and increase of the seed substitution rate, as well as introduction of new high-yielding varieties to increase yields.

Imports of edible oil in the period from November 2022 to May 2023 increased by 18% to 9.1 million tons compared to the same period last year. Imports of crude palm oil showed the sharpest jump to 5.3 mln tons, or 43% year-on-year.

Tags: sunflower oil, soybean oil, prices, soybean, India, palm oil, imports, mustard