The Agricultural Outlook Report 2021-2030 recently published by OECD-FAO should make Indian policymakers sit up and take note. The government has announced that the country will pursue the goal of self-sufficiency (Aatmanirbhar) in vegetable oils. The announcement has so far remained just a statement of intent without any real progress in designing strategies for boosting domestic production.
Since the mid-1990s, India has continued to face a serious shortage of edible oil, a critical food ingredient of mass consumption. Over the years, our import dependence has worsened to an alarming level to stand at about 70 per cent today. We produce only a third (7-8 million tonnes) of our consumption need while our import stands at a staggering 13-14 ml t worth over $ 10 billion (₹75,000 crore) per annum.
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We have the dubious distinction of being the world’s single largest import market for edible oil. The more dependent we remain on the world market for meeting our consumption needs, the more vulnerable the nation’s food security would become. That’s why the sector outlook till 2030 is important.
Of all agricultural commodities, vegetable oil has one of the highest trade shares (41 per cent) of production. Palm oil dominates the global vegoil market. Malaysia and Indonesia, the world’s leading suppliers of palm oil, will continue to dominate world trade. The OECD-FAO report has however projected that future production growth will be constrained by land availability, age of trees, yield improvement and sustainability challenges. So, further production growth will be limited.
At the same time, India is projected to maintain its high import growth of 3.4 per cent per annum due to growing domestic demand and limited production growth opportunities. In other words, the world does not believe that India will be anywhere near self-sufficiency anytime soon.
India’s vegetable oil consumption is projected to maintain a high per capita growth of 2.6 per cent per annum, reaching 14 kilograms per capita by 2030. It is another matter that the per capita number masks the reality by ignoring the skew in the consumption pattern the country has witnessed for decades. In future, consumption will be driven by increased urbanisation, a shift in dietary habits towards processed foods that have high vegoil content, the report has pointed out.
This simply means that India’s vegetable oil consumption demand growth will outpace production growth the whole of this decade – not a happy forecast for New Delhi. Conceding that the pandemic over the last 15 months has slowed down activities, there is nothing to prevent the government from evaluating various strategies to boost domestic output and gradually work towards reducing the import dependence in a time bound manner.
While imports are inevitable in the short-to-medium term, the adverse effects of such imports on domestic producers (mainly oilseed growers) can be mitigated by strictly regulating vegetable oil imports so as to curb speculative trade in the physical market.
To boost domestic output and rein-in the unregulated import of vegetable oil, several practical recommendations were made at the National Seminar on Oilseeds held in Hyderabad during February 2020. The government must work on them and demonstrate sufficient ‘political will’ to walk the talk of self-sufficiency.
(The author is a policy commentator and agribusiness specialist. Views are personal)
cumcumshot
HOw is that an amateur always speaks like a pro who has been in the industry for years.
In the actual happening, this dude has made many2 wrong predictions even after so called his intense study.
2021-08-04 23:01