Oil Palm Industry Economic Journal Vol. 10 (2) September 2010 p. 1-16

India’s Oils and Fats Policy: Production of Oilseeds towards Self-sustaining Level

Punia MS
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India is one of the largest producers of oilseeds in the world with a wide range of oilseed crops grown in different climatic zones. India accounts for an estimated production of about 28 million tonnes of nine cultivated oilseeds during the year 2007/2008, contributing about 6%-7% of the world’s oilseed production. Domestic vegetable oil production is about 8.2 million tonnes, which is not sufficient to meet local requirements because domestic consumption of edible oils is about 12.5 million tonnes. The deficit is met through imports, mainly refined, bleached and deodorized (RBD) palm oil from Malaysia and Indonesia. The surge in edible oil consumption is due to the increased purchasing power of the middle class, and the removal of the import duty. India has been the biggest driver of consumption growth this year. After the removal of import duty, we can state that the Indian vegetable oil market has integrated with the world market. Vegetable oil imports increased sharply due to a fall in prices of edible oils worldwide, while the zero import duty has encouraged the vegetable oil importers. Importers and traders imported oils in large quantity in anticipation that the government may re-impose the import duty at about 20% from zero percent, perhaps building up stocks with a view to making quick profits. Groundnut, rapeseed/mustard, sesame, safflower, linseed, niger and castor are the major traditionally cultivated oilseeds. Soyabean and sunflower have also assumed importance in recent years. Coconut is the most important amongst the plantation crops. Efforts are being made to grow oil palm in some of the states. Among the non-conventional oils, rice bran oil and cottonseed oil are the most important. In addition, oilseeds of tree and forest origin, which grow mostly in tribal inhabited areas, are also a significant source of vegetable oils.

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