Short-term outlook for edible oil prices is strong

The government should aim to increase domestic edible oil production to meet the roughly 0.7 million tonnes (MT) incremental increase in demand each year in order to reduce rising edible oil imports, which are threatening to put pressure on the current account, said Atul Chaturvedi, President of the Solvent Extractors’ Association of India (SEA), on Thursday.

Chaturvedi told on the sidelines of Global India 2022 that “our objective should be to meet the annual rise in consumption of edible oil so that our imports are capped at roughly 13 MT and we thereafter lower our imports progressively through growing domestic output.” India can lower price volatility at home and save import costs, according to him, by banning imports of edible oil. “The country imported 14 MT of cooking oil in 2018–19, for a total import value of Rs 65,000 crore, which increased to Rs 1.5 trillion in 2021–22,” he added.

The import price gap between palm oil and soyabean oil has been around $350 per tonne, which Chaturvedi claims is not sustainable in the long run, even though palm oil prices have eased since June. Back a week ago, the landing price of crude palm oil in Mumbai was $950/tonne, while the prices for soyabean oil and sunflower oil were $1,335/tonne and $1,320/tonne, respectively. By producing 2.8 MT of palm oil by 2030 as part of the national edible oil mission-Oil Palm, the government hopes to reduce imports by 25–30%.

A total of 0.35 million hectares (MH) of land are currently planted with palm trees, and by 2025–2026, an additional 0.65 MH will be planted under the Oil Palm national mission on edible oils. We intend to decrease our reliance on palm oil imports by 2030, according to a government official working in the national oil palm mission, by putting more land under palm plantation over the next three years, particularly in Andhra Pradesh, Telangana, Assam, Tripura, and Mizoram.

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