Expectations of high domestic production of edible oil and sluggish demand decrease imports. India to import edible oil within a range of 12.5 to 13.5 million tonnes in 2020-21.
Decrease in Edible Oil Imports
Solvent Extractors Association of India pegged India’s edible oil imports for 2020-21 at 12.5-13.5 million tonne. SEA President Atul Chaturvedi attributes a possible rise in domestic production and sluggish hotel consumption amid the pandemic to low imports. Further, he added that because India is a price-sensitive market, high prices will adversely affect consumption.
The government kept refined oil imports under a restricted category. Subsequently, it imported 4.21 lakh tonne in 2019-20 as compared to 27.31 lakh tonne in the previous year. Also, noting the 97% share of crude oil in total edible oil import, Mr Chaturvedi mentioned the improving refining capability of the country. India imported around 133 lakh tonnes of edible oil from November 2019 to October 2020. This is low against the 149 lakh tonnes in the previous year. The demand fell by two million tonnes this year, leading to a fall in imports.
Ban on Blending of Mustard Oil to Boost Mustard Seed Production
The government banned blending of mustard oil with any other cooking oil with effect from October 1 this year. Angshu Mallick, Deputy CEO at Adani Wilmar, asserted that the decision would benefit both farmers and consumers. While farmers will get better prices for mustard owing to increased demand, consumers would get pure mustard oil. The mustard oil is often blended with rice bran, palm, and soybean oil.
In all, experts believe that the contraction in demand for edible oil from hotels, restaurants, and cafes is likely to last for another six months. Also, citing the coverage of land under oilseeds, industry experts estimate an increase in domestic edible oil production by 10-15 lakh tonnes. This will help the nation reduce its import dependence.