Edible oil imports doubled in four yrs to 88 LT

Driven by widening demand-supply mismatch, India's edible oil imports have more than doubled in just four years to over 88 lakh tonnes in 2009-10 oil year, and the momentum is expected to continue in the coming years.

In the first eleven months of the current oil year, which ends in October, India has already imported 80.42 lakh tonnes edible oil and up to eight lakh tonnes is on the anvil in the current month taking the tally to over 88 lakh tonnes, said B V Mehta, Executive Director, Solvent Extractors' Association.

India imported only 44.16 lakh tonnes edible oils in 2005-06, 47.14 lakh tonnes in 2006-07, 56.08 lakh tonnes in 2007-08 and 81.83 lakh tonnes in 2008-09 oil year.

The rise in imports is led by galloping increase in demand for edible oils, and a near stagnant oilseeds production in the last decade due to non growth in acreage.

As per a Rabo India Finance report, published recently, while India's edible oil consumption has grown by 6.5 per cent per annum since 2000-01 to reach 147 lakh tonnes -- valued at $15 billion -- the oilseeds production has grown only by 4.7 per cent during the period.

Further increase in areas under oilseeds cultivation is a big challenge due to lack of arable land and competition from grains and other cash crops. 

"Low quality seed, low access to inputs, poor farming practices and the fact that much of India's oilseed crop is cultivated in unirrigated areas are the reasons for oilseed productivity lower than the global average," Rabo India said.

Moreover, India's per capita consumption of about 12.7 kg is well below the global average of 20 kg. 

Coupled with rising income on a growing economy, India's reliance on imports -- over half the total demand -- is only going to escalate in the coming years.