Govt allays palm oil shortage fears

India has adequate stocks of edible oil to tide over the immediate crisis emerging from Indonesia’s ban on palm oil exports, according to the government.

In a statement released on Sunday, the government said the country had around 2.1 million tonnes (mt) of edible oil in stocks at present while another 1.2 mt was expected to be imported this month.

These will be sufficient to cover the lean period owing to the ban on export.

India’s edible oil prices are expected to spike again after remaining high for a prolonged period due to a sudden ban on exports by Indonesia, the world’s largest producer of palm oil, announced last week.

Globally, and also in India, palm oil is used in things from cakes and frying fats to cosmetics and cleaning products.

There are questions on how long the ban will remain because Indonesia, according to trade sources, is sitting on stockpiles of palm oil, which it needs to liquidate in the absence of adequate storage capacities.

But the development has spooked Indian edible oil markets because palm oil comprises almost 70 per cent of India’s annual edible oil imports, and it accounts for 8-8.5 mt. Indonesia supplies around 45 per cent of this while the rest comes from Malaysia.

Trade sources expect domestic prices of edible oil and also palm oil-based products to rise by 7-10 per cent in the short term due the absence of supply.

The Centre, meanwhile, said apart from adequate stocks, the production of soybean seed for 2021-22 had been estimated at 12.60 million tonnes, according to the second advance estimate against last year’s production of 11.2 million tonnes.

That apart, mustard production is expected to be healthy at 11.4 mt.

“The food department is monitoring the price and availability situation and meetings are held regularly with major Edible Oil Processing Associations to discuss further reduction in the domestic edible oil prices and MRP to give relief to consumers,” the official statement added.

It added special teams had been constituted by both the Centre and state governments to prevent hoarding and profiteering. “These surprise checks shall continue to check unscrupulous elements,” the statement added.