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India has enough edible oil to tide over Indonesian crisis for now: Govt

Centre is monitoring prices regularly; has formed special teams to check hoarding

Topics
edible oil  | Indonesia | Palm oil imports

Sanjeeb Mukherjee  |  New Delhi 

Photo: Bloomberg
Palm oil comprises almost 70 per cent of India’s annual edible oil imports totalling around 8-8.5 million tonnes. (Photo: Bloomberg)

The government has expressed the hope that India has adequate stocks of edible oils with it to tide over the immediate crisis emerging from Indonesia’s ban on palm oil exports.

In a statement released on Sunday, the government said that the country has around 2.1 million tonnes of edible oils in stocks at present while another 1.2 million tonnes is in transit from exporting nations expected to arrive in May.

This as per independent assessments should be good enough to cover around three months of domestic requirement as India per month on an average consumes something in between 1.0-1.1 million tonnes of edible oils in various forms.

Officials said the stocks in hand and that in the pipeline is good enough to cover the lean period due to the ban on exports (around three months), by which time some decision will be made on whether to extend the ban or not.

Trade sources said there are a lot of questions as to whether can hold on to the ban for as long as it is sitting on stockpiles of palm oil which it needs to liquidate in the absence of adequate storage capacities.

Nonetheless, there is a fear that India’s 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 everything from cakes and frying fats to cosmetics and cleaning products.

Though there are questions on how long the ban will remain in place, because Indonesia, as per 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 markets as palm oil comprises almost 70 per cent of India’s annual imports totalling around 8-8.5 million tonnes.

supplies around 45 per cent of this, while the rest comes from neighbouring Malaysia.

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

The Centre, meanwhile, said that apart from adequate stocks, domestically, production of soybean seed for 20221-22 has been pegged at 12.60 million tonnes, as per the second advance estimate, which is over 0.61 million tonnes higher than last year’s production of 11.2 million tonnes.

That apart, mustard production is also expected to be healthy at 11.4 million tonnes.

“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 that special teams have also been constituted by both Centre and State governments to prevent hoarding and profiteering under the Essential Commodities Act.

“These surprise checks shall continue to check unscrupulous elements,” the statement added.

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First Published: Sun, May 01 2022. 15:57 IST
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