Dependence on imports to meet domestic demand of edible oils will remain intact

21-Nov-2024 04:39 PM

India's reliance on edible oil imports will remain substantial, as the country continues to face a widening gap between the demand for edible oils and its domestic production.

Despite an expected increase in domestic oilseed production—from 350 lakh tonnes to 450-500 lakh tonnes by 2029-30—this growth will likely fall short of meeting the rising consumption, which is projected to increase at a faster pace.

Currently, India is the world’s largest importer of edible oils. If the consumption grows at an average rate of 3% per year, it could reach 280-300 lakh tonnes annually by the end of the decade.

At a higher growth rate of 4%, this figure could rise to 320 lakh tonnes. In contrast, even with a projected increase in domestic oilseed production, India will still need to import a significant portion of its edible oils to satisfy demand.

To mitigate this gap, India is focusing on increasing the production of oil-bearing crops such as oil palm, rice bran, and cottonseed.

The government is prioritizing the expansion of oil palm plantations, which offer a long-term oil supply, along with improving oil extraction rates from mustard, groundnut, sesame, and sunflower seeds.

These measures are essential for enhancing domestic production, although they are not expected to fully meet the growing demand.

In response to this, the Indian government has raised the import duty on edible oils by 20%, with the aim of reducing imports by about 10 lakh tonnes in the 2024-25 marketing season.

However, even with these efforts, the reliance on imports to meet domestic demand for edible oils will continue for the foreseeable future.