India’s addiction to cooking oil imports may last for years
NEW DELHI: Indians will probably buy expensive cooking oils from overseas for at least another 15 years, as demand continues to far outpace domestic production.
Consumption is expected to climb in India by as much as 17% over the next four years, according to B.V. Mehta, executive director of the Solvent Extractors’ Association. A rise that steep would further widen the manufacturing gap: India will likely produce about 10 million tons of edible oils in 2021-22, compared with local consumption of as much as 23 million tons.
India, one of the world’s largest buyers of vegetable oils, has struggled to wean itself off imports. Farmers have typically focused on growing cotton and staples like rice, wheat and sugar, partly because the government sets price floors for these crops and buys some of them -- such as food grains -- in bulk for its welfare programs.
A shift in mindset is not likely overnight. High-yielding rapeseed and sunflower varieties and remunerative prices could boost the nation’s output. But incentives for India’s farmers to grow oilseeds are still weak, according to Siraj Chaudhry, managing director and chief executive officer of National Commodities Management Services Ltd., a warehousing and trading company.
Change has to start locally, he said, with a close watch on the crop cycle. Rice farmers should be encouraged to grow sunflower during India’s rainy months, for instance, and wheat producers to cultivate rapeseed in the winter. Higher production of rice bran oil and expensive peanuts could also serve as supplements, he said.
Palm oil, in particular, has potential to close the production gap. Indians often prefer it over soft oils because it’s cheaper and can be blended easily with other fats. It also lasts longer than other choices, making it cost-efficient for bulk users such as restaurants and hotels. Moving part of the supply chain locally may help. Commodities experts have lobbied the Indian government to import soybeans and crush them domestically, rather than simply purchase soybean oil. That would potentially boost soy oil supplies at home and meet rising demand for feed from the poultry industry. “It has to be a combination of factors, including providing new technology to boost productivity,” Chaudhry said.
Cooking oils are an integral part of the Indian diet. They play a starring role in feasts served during the country’s massive festivals. They’re used to fry jalebis, the sticky, roadside sweet, and for practically every other staple dish. Their ubiquity has made India the world’s biggest importer of palm, soybean and sunflower oil. Increasing domestic palm oil production would augment the overall supply of vegetable oil in the country, said Mehta. India aims to produce 1 million tons (MT) by 2026 and further boost output to 2.8 MT by 2030, up from 300,000 tons, he said.