The government is planning measures to increase domestic vegetable oils production, while also seeking suggestions from stakeholders following a 26 per cent surge in vegetable oil imports in six months to May.

India imported 78 lakh ton of vegetable oil between November and May, compared with 62 lakh tons in the year earlier period.  “Total import of vegetable oils could value Rs 60,000 crore this year,” said B V Mehta, executive director at Solvent Extractors Association of India.  This is the third largest after crude oil and lubricants, and gold.

“The government is concerned at the huge import, especially when we can take to increase local output and reduce imports,’’ Mehta said adding, “Domestic output has almost been stagnant for years while imports are rising.’’

Among factors he cited include drop in crude oil prices globally, which reduces the attractiveness to use bio-diesel as a substitute. Then, there is a lack of incentive for local farmers since oil crushing companies find cheaper imports economical instead of the local produce. Indonesia, as a case, has been dumping its vegetable oils to overcome surplus. The government is yet to react with any increase in import duties.

Over the years, domestic consumption of edible oil has increased with rise in per capita income, greater propensity to eat outside food that invariably contains more oil, and greater affordability. Since 1992-93, import has increased from 3 per cent to more than 55 per cent now.

Among measures the government is considering include expanding areas for cultivation, including the north-eastern states under its Mini Mission-II. States such as Punjab and Haryana could substitute wheat and rice with rapeseed, mustard and maize.

Changed crops would require less water, and help farmers switch from wheat and rice that the nation has in surplus to items that are being imported. The switch-over could help reduce imports for vegetable oils.

The government should consider raising import duties on refined oils to 25 per cent from 15 per cent, SEA has recommended to the government, among others.

Since India’s productivity is between 47 per cent and 69 per cent of global average for soybean, cotton, groundnut, sunflower and mustard, the country could introduce GM crop seeds and also rope in private companies for greater investment, it has recommended.

As the second largest producer of paddy, India could double its rice bran oil output from the current 9 lakh tons through policy and tax reforms, it said.

Source:newindianexpress.com