Centre plans to make registration mandatory for vegetable oil units

The government proposes mandatory registration for all vegetable oil producers under a new amendment to the Vegetable Oil Products, Production, and Availability Order of 2011

Amid rising edible oil prices, the central government has proposed changes to the Vegetable Oil Products, Production and Availability (Regulation) Order of 2011 (VOPPA) that seeks to regulate all producers and sellers of vegetable oil or any related product, including solvent-extracted oil through modern methods.

 

The proposal, issued a few days ago, also includes mandatory registration and penalties for those who fail to register on time. It has sparked concern among a section of the edible oil industry, who fears it could lead to excessive regulation and a return to the “license raj” era.

 

The amendments empower the Directorate of Sugar and Vegetable Oils (DVSO) in the food ministry to prescribe the maximum or minimum usage limits of any vegetable oil in the production of any or all vegetable oil products.

 

 

The government also proposes that every producer of vegetable oils or related products must submit fortnightly reports on the quantity of oils received in their processing units and used by them.

 

They will also have to give full details of stocks held, quantities, and varieties of solvent extracted, produced, and sold in the preceding month.

 

A senior industry official said India had over 15,000 oil mills and more than 250 Vanaspati manufacturing units, most of which are in the small-scale sector. “Making registration and data reporting mandatory for them would create unnecessary bottlenecks in their operations,” the official said, adding that the order requires careful deliberation and discussion among all stakeholders before it is fully implemented. 

 

“Around 60-70 per cent of oil mills that process groundnut and rapeseed work on a very small scale, and following the regulations could be slightly challenging,” the official explained.

 

In the 2023-24 edible oil year that ended in October, India imported around 16.23 million tonnes of vegetable oils, of which 15.96 mt was edible oils (around 98.33 per cent) and the rest were non-edible oils.

 

Within this 15.96 mt of edible oils, around 56 per cent was palm oil, both in crude and refined forms.

 

India’s annual domestic edible oil production is around 12-14 mt, while the demand is around 27-29 mt. The balance is met through imports.

 

Consumer price index-based inflation in edible oils has consistently remained in double digits, hovering around the 19-20 per cent mark for most oils.

 

According to an assessment by NITI Aayog a few years ago, India’s demand for edible oils is projected to rise to around 31 mt by 2047-48, up from 22 mt in 2019-20. Domestic edible oil production is expected to grow to around 24 mt from around 12 mt in 2019-20. 

Key proposals

 

Seeks to penalise those who fail to register themselves within the stipulated time

 

Fortnightly update on the quantity of oils received by producers of vegetable oils/products

 

Disclosure details of stocks held, quantity and variety of solvent extracted, produced, and sold in the preceding one month