SEA: New strategy needed to boost edible oil crop

India needs to adopt a strategic shift in priorities, and a dynamic policy framework, for effective demand-supply management of edible oil economy if it has to achieve a three fold growth in oilseed output by 2014-15.

The opposite seems to be happening now: demand-supply imbalance is widening. Demand for edible oils is both income and price elastic and the demand-push comes from the increasing population as also from rise in the standard of living caused by higher per capita income, according to D P Khandelia, president of the Solvent Extractors Association (SEA) of India.

According to NCAER, demand for edible oils in a decade may be 22.8 million tonnes per annum (mntpa) if per capita income increased 4 per cent, 25.9mntpa if income rose 5 per cent and 29.4mntpa if per capita income increased 6 per cent. This would require almost three to four fold increase in oilseeds supply by 2014-2015.

A major shift in priorities and a policy framework for effective demand-supply management would be needed to achieve this.

A special thrust should be given to oilseeds and oils development through creation of a 'Oilseeds and oil development fund' funded by a 'development cess' on imported edible oils.

India imported about 51.1 lakh tonnes of edible grade and 2.8 lakh tonnes of non-edible grade oils in the last oil year, pushing up total imports to about 54 lakh tonnes of vegetable oils.

This year, the domestic crop would be a large one. As a result, vegetable oil imports were expected to fall by 10 lakh tonnes to 42-44 lakh tonnes in the current oil year (Nov-Oct).

The rabi oilseed crop for the year 2003-04 season was expected to be about 99.6 lakh tonnes against 61.5 lakh tonnes last year. The crop was small last year owing to the drought that hit the country.

The rapeseed and mustard crop has jumped to 67 lakh tonnes from 33 lakh tonnes last year. Oil recovery would also be higher by about 1.5 per cent.

The combined kharif (winter) and rabi (summer) oilseed crop was expected to be about 238.5 lakh tonnes compared to 149.6 lakh tonnes last year.

This would lead to a rise in overall vegetable oil availability from primary and secondary sources to 77.8 lakh tonnes compared to 51.2 lakh tonnes last year. In a normal year, edible oil availability would be about 60-65 lakh tonnes from a crop of 200 lakh tonnes of oilseeds.

The oil sector however cannot afford to be complacent because the crop would be larger this year.