Last Updated on Sep 16, 2022 by Aradhana Gotur

India’s edible oil imports have risen 35% y-oy to 1.3 mn tonnes (MT) in August against 1.01 MT in the same month last year. In July, India imported 1.2 MT of the commodity. Edible oils include oils from coconuts, cottonseeds, olives, palm, peanuts, rapeseed, soybeans, and sunflowers that are used for cooking.

The import of edible oil rose as Russia and Argentina emerged as significant sunflower oil exporters to India. The country bought ~1,35,000 tonnes of sunflower oil in August, of which 72,780 tonnes were from Russia and 30,600 tonnes from Argentina.

Ever wondered why an agricultural country like India is importing such huge quantities of this essential commodity?


Second-largest consumer

India is the world’s largest importer of vegetable oil and the second-largest consumer of the commodity. China and the US are the next biggest importers according to the Ministry of Agriculture. Oilseeds and edible oils are extremely price-sensitive.

  • India consumed approximately 23 MT of vegetable oils in FY 2021. To put this in context, the worldwide consumption in 2021 was over 205 MT.
  • India meets 55-60% of its needs through imports, and although oilseed production in India has risen over the years, the total output is not keeping pace with consumption. 
  • According to the Solvent Extractors’ Association of India, India imported edible oil worth Rs. 1.17 lakh cr. during the 2020-21 marketing year ending October.
  • In 2019-20, India produced 10.66 MT of edible oil and imported 13.42 MT to meet the local demand.

Import sources

  • Palm oil (crude + refined) constitutes roughly around 62% of the total edible oils imported. Indonesia and Malaysia are the main suppliers.
  • Soyabean oil (22%) is imported from Argentina and Brazil.
  • Sunflower oil (15%) is imported from Ukraine and Russia.

Why India cannot produce more oilseeds

  • Nearly 72% of the oilseed area is restricted to rainfed farming done by small farmers, leading to poor productivity. 
  • Low quality of seeds results in lower yields and high production and marketing costs.
  • Farmers opt to grow other crops that need lesser input costs to cultivate.

Government initiatives to raise oilseeds

  • In the Budget 2022-23, the government earmarked Rs. 1,500 cr. to develop the oilseed industry. Out of this, Rs. 900 cr. have been allocated towards the edible oil palm programme and the remaining Rs. 600 cr. to the oilseed programme.
  • National Mission on Edible Oils aims to promote oil palm cultivation in the North Eastern States and Andaman & Nicobar by raising the area under oil palm cultivation.

About The Boring News Co.This news post has been contributed by The Boring News Co. which is a free daily email newsletter that gets you updated on the most important events across policy, business, international affairs, legal, and sports categories in under 5 minutes. They claim to deliver news with no sensationalism, gossip, political slugfests, or opinions – just the facts that matter in bullet points.

Thomas Sampathraj
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

The blog posts/articles on our platform are purely the author’s personal opinion and do not necessarily represent the views of Anchorage Technologies Private Limited (ATPL) or any of its associates. The content in these posts/articles is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, please consult a professional financial or tax advisor. The content on our platform may include opinions, analysis, or commentary, which are subject to change, without notice, based on market conditions or other factors. Further, the use of any third-party websites or services linked on the website is at the user's discretion and risk. ATPL is not responsible for the content, accuracy, or security of external sites. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. The examples and/or securities quoted (if any) are for illustration only and are not recommendatory. Any reliance you place on such information is strictly at your own risk. In no event will ATPL be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.

By accessing this platform and its blog section, you acknowledge and agree to the Terms and Conditions of this website, Privacy Policy and Disclaimer.