Current Economic Statistics and Review For the
Week
Ended October 13, 2008
Theme
of the week:
Economy of Edible Oilseeds and Edible Oils *
Edible
oils are one of the most sensitive, essential and irreplaceable
commodities in Indian food basket. They constitute an important component
of Indian households’ expenditure on food. According to NSS 61th
Round (January-June 2004), average monthly per capita consumption
expenditure (MPCE) of edible oil in food was 4.6 per cent in rural
Economy
of Oilseeds
The country, blessed with different agro-climatic conditions, produces a wide range of oilseeds, which act as a primary source for edible oils produced in the country. A total of nine oilseeds, traditionally cultivated in the country, include groundnuts, mustard/rapeseed, sesame, safflower, linseed, nigerseed, castor, soyabean and sunflower. Groundnuts, soyabean and mustard have been the major contributors to the oilseeds production with their combined share standing at more than 85 per cent of the country's oilseeds production. Apart from these, secondary sources, namely, coconut that forms a part of plantation crops, rice bran and cottonseed, which are non-conventional sources, oilseeds of tree and forest origin that grow mostly in tribal inhabited areas and oil palms grown in Andhra Pradesh, Karnataka, Tamil Nadu, Kerala and Andaman and Nicobar Islands, also, have assumed importance as secondary sources of oil-production in recent years.
Oilseeds
are grown mainly on marginal and sub-marginal lands under low input usage.
Area covered under oilseeds occupied 24.5 per cent of the total irrigated
area and 13.8 per cent in 2003-04. Oilseeds’ cultivation and output is
concentrated in central and southern parts of the country, mainly in
|
Table
1: CAGR reported for Total
Nine Oilseeds (per
cent) |
|||
|
Period |
Area |
Production
|
Yield
|
|
1950-60 |
2.5 |
4.1 |
1.6 |
|
1960-70 |
0.4 |
0.3 |
-0.1 |
|
1970-80 |
0.4 |
0.7 |
0.3 |
|
1980-90 |
2.4 |
5.5 |
3.0 |
|
1990-00 |
0.2 |
2.2 |
2.1 |
|
2000-07 |
3.9 |
6.6 |
2.7 |
|
1950-2007 |
1.6 |
3.0 |
1.4 |
Area
covered under the entire group of 9 oilseeds has increased from 10.73
million hectares in 1950-51 to 25.99 million hectares in 2006-07,
registering an average compound annual growth rate (CAGR) of 1.58 per cent
during the period of 57 years. While their production has risen from 5.16
million tonnes to 23.26 million tonnes marking an average CAGR of 3.03 per
cent, the yield has improved at an average CAGR of 1.43 per cent to 895 kg
per hectare from 481 kg per hectare during the same period (Table 1).
A
closer look at the trends of area cultivated, production and yield of
these oilseeds (Graph A) indicates that the group of oilseeds as a whole
did not experience any major development with respect to any of these
aspects during first three decades after independence. In fact, the growth
rates in terms of area covered, production and productivity decelerated
considerably during this period (Table 1). Concentrated efforts made
towards boosting the production and productivity of major foodgrains like
rice and wheat through various incentives like significant hikes in
minimum support price (MSP), provision of assured procurement and
distribution channels, marketing infrastructure and technological
assistance in the form of improving the quality of different input
materials, and allocation of financial resources for research and
development, etc., have been some of the important factors that encouraged
rice-wheat cropping pattern and thus, indirectly, restrained the growth of
other crops; oilseeds being one of them.
Notwithstanding this, ‘All-India Coordinated Project on Oilseeds’ had been launched in 1967 that helped development of different types of high yielding varieties of oilseeds along with production practices suited to various agro-climatic conditions. Only a few major edible oilseeds like mustard, soyabean and sunflower have been genetically modified with emphasis on agronomic traits[1]. However, oilseeds production witnessed a major break-through in 1986, with the central government launching a more comprehensive programme, called ‘Technology Mission on Oilseeds (TMO)’, aiming to provide a thrust to production, processing, marketing, etc. of oilseeds. Besides, in 1989, National Dairy Development Board (NDDB) was assigned a role of market intervention for edible oilseeds and oils for ensuring remunerative prices to farmers, reasonable costs to consumers and attaining of self-sufficiency by government of India (refer to footnote No. 1) Consequently, the growth rates in terms of area cultivated, production and yield recorded sharp increases towards the end of 1980s. This can be observed from CAGR for area, production and yield for the decade 1980-90 standing at 2.4 per cent. 5.5 per cent and 3.0 per cent, respectively. Acceleration in the growth rates continued till late 1990s with the year 1998-99 marking the highest ever levels of production (24.75 million tonnes) as well as that of yield (944 kg per hectare). However, adverse weather conditions (drought witnessed by major oilseeds producing states like Chattisgarh, Madhya Pradesh and Rajasthan) in the successive years hampered the production and productivity of oilseeds, which stood at 14.84 million tonnes and 691 kg per hectare, respectively, in 2002-03.
Nonetheless, the situation reversed completely, with oilseeds regaining their momentum in 2003-04, on account of favourable weather conditions, registering a growth of 10 per cent in area cultivated; a surge of 70 per cent in output and that of 54 per cent in yield over the previous year (Annexure I). Though the rising trends did not continue for each of the successive years, the cyclical pattern that has been observed vis-à-vis area, production and yield helped CAGRs for the period 2000-07 to sustain at levels higher than those attained during earlier decades (Table 1).
At present, improved sowings of oilseeds during kharif season 2007 has indicated better output prospects during this season, which is likely to rise by an impressive 15.7 per cent to around 16 million tonnes, on account of remarkable increase in output of groundnut and soyabean. In fact, soyabean production is expected to touch a new high of 9.04 million tonnes for kharif season of 2007-08.
Processing
of Oilseeds
|
Table
2: Status of Vegetable Oil Industry |
|||
|
Type
of Vegetable |
No.
of Units |
Annual
Capacity |
Average
Capacity |
|
Oilseed |
Approximately |
425 |
10-30 |
|
Solvent |
711 |
313 |
31 |
|
Refineries
attached |
127 |
51 |
45 |
|
Refineries
attached |
297 |
36
(in terms of oil) |
27 |
|
Independent |
585 |
35
(in terms of oil) |
36 |
|
Total
Refineries |
1009 |
122
(in terms of oil) |
35 |
|
Vanaspati
Units |
264 |
53
(in terms of Vanaspati, |
18 |
|
Source:
www.fcamin.nic.in |
|||
Edible
oilseeds processing consists of three operations: crushing and expelling
(separating oil from the solids), solvent extraction (to chemically remove
residual oil from the oilcake solids), and oil refining. The ghanis
and small-scale expellers, generally, carry out the first operation.
While ghanis belong to the small scale industries (SSI) segment and
usually serve the rural markets, small scale expellers (which use metal
screws to press or expel oil from seeds) are larger than the ghanis, oil expelling capacity being in the range of 5-10 tonnes per
day, compared to around 50-60 kilos a day for ghanis. Solvent extractors, engaged at the second stage of
processing, belong to the organised segment and are also the second
largest after the SSI segment, in the domestic edible oil industry. They
use modern technology to process low oil and high meal seeds (for example
soyabean, cottonseed) into edible oil and de-oiled cake. Oil refining also
belongs to the organised sector and they generally refine both expeller
oils and solvent extracted oils. Vanaspati is made by hydrogenation of
refined oil to vegetable shortening or spread and is similar to the milk
product ghee and absorbs around 10 per cent of the total edible oil supply
in
Production
of Edible Oils in
As stated earlier, production of edible oils is directly proportionate to production and availability of oilseeds. Total edible oil production in the country has risen at a CAGR of 0.4 per cent from 74.7 lakh tonnes in 1995-96 to around 87 lakh tonnes in 2005-06 (Table 3). Though the primary sources, i.e., domestically produced oilseeds, have contributed almost three fourth of the total edible oil production in the country, the uninterrupted and ever increasing demand for edible oils in the domestic market in addition to inconsistent supply of domestically produced oilseeds have made the secondary sources play a critical role in domestic production of edible oils (Table 3).
Among the primary sources rapeseed and mustard oil has the largest share of 34.2 per cent in total edible oil produced in the country in 2005-06, followed by groundnut oil and soyabean oil. While the share of rapeseed and mustard oil has risen slightly from 33.4 per cent recorded in 1995-96, that of groundnut oil has declined over a decade from 31.3 per cent in 1995-96 to 27.5 per cent in 2005-06. On the contrary, the share of soyabean oil has increased from 14.6 per cent to 20.6 per cent during the same decade. Among the secondary sources, rice bran has emerged as the largest contributor to the edible oil production with a share of 30.8 per cent in 2005-06 followed by cottonseed, coconut and solvant extracted oils. Solvent extracted oils, in fact, had the major share (25.8 per cent) among secondary sources in 1995-96. However, over a span of a decade, its contribution has declined to 18.6 per cent. Similarly, coconut oil also has experienced a fall in its share in the total edible oil production from 22.1 per cent in 1995-96 to 19.0 per cent in 2005-06. On the other hand, contribution of cottonseed has improved from 21.0 per cent to 25.8 per cent during the same period (Table 3).
|
Table
3: Contribution of Primary and Secondary Sources to Total Edible
Oil Production: A Decadal Perspective |
|||||||||||
|
(lakh
tonnes) |
|||||||||||
|
|
1995-96 |
1996-97 |
1997-98 |
1998-99 |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05
|
2005-06* |
|
A.
Primary Sources |
55.68 |
61.57 |
51.38 |
59.70 |
50.15 |
44.99 |
50.16 |
36.24 |
60.70 |
60.67 |
65.01 |
|
|
{74.6} |
{75.8} |
{72.8} |
{75.0} |
{73.6} |
{71.4} |
{72.2} |
{66.1} |
{75.3} |
{74.9} |
{74.6} |
|
Groundnut
|
17.44 |
19.87 |
16.95 |
20.66 |
12.09 |
14.74 |
16.16 |
9.48 |
18.69 |
15.58 |
17.84 |
|
|
(31.3) |
(32.3) |
(33.0) |
(34.6) |
(24.1) |
(32.8) |
(32.2) |
(26.2) |
(30.8) |
(25.7) |
(27.4) |
|
|
{23.4} |
{24.4} |
{24.0} |
{26.0} |
{17.7} |
{23.4} |
{23.3} |
{17.3} |
{23.2} |
{19.2} |
{20.5} |
|
Rapeseed
& Mustard |
18.60 |
20.65 |
14.57 |
17.56 |
17.94 |
12.99 |
15.76 |
12.03 |
19.50 |
23.54 |
22.22 |
|
|
(33.4) |
(33.5) |
(28.4) |
(29.4) |
(35.8) |
(28.9) |
(31.4) |
(33.2) |
(32.1) |
(38.8) |
(34.2) |
|
|
{24.9} |
{25.4} |
{20.6} |
{22.1} |
{26.3} |
{20.6} |
{22.7} |
{21.9} |
{24.2} |
{29.1} |
{25.5} |
|
Soyabean
|
8.14 |
8.61 |
10.34 |
11.43 |
11.33 |
8.45 |
9.54 |
7.45 |
12.51 |
11.00 |
13.37 |
|
|
(14.6) |
(14.0) |
(20.1) |
(19.1) |
(22.6) |
(18.8) |
(19.0) |
(20.6) |
(20.6) |
(18.1) |
(20.6) |
|
|
{10.9} |
{10.6} |
{14.7} |
{14.4} |
{16.6} |
{13.4} |
{13.7} |
{13.6} |
{15.5} |
{13.6} |
{15.3} |
|
Sunflower
|
4.16 |
4.13 |
2.94 |
3.12 |
2.29 |
2.15 |
2.24 |
2.88 |
3.07 |
3.92 |
4.73 |
|
|
(7.5) |
(6.7) |
(5.7) |
(5.2) |
(4.6) |
(4.8) |
(4.5) |
(7.9) |
(5.1) |
(6.5) |
(7.3) |
|
|
{5.6} |
{5.1} |
{4.2} |
{3.9} |
{3.4} |
{3.4} |
{3.2} |
{5.3} |
{3.8} |
{4.8} |
{5.4} |
|
Sesamum |
1.64 |
1.98 |
1.77 |
1.63 |
1.49 |
1.61 |
2.16 |
1.37 |
2.42 |
2.09 |
2.27 |
|
|
(2.9) |
(3.2) |
(3.4) |
(2.7) |
(3.0) |
(3.6) |
(4.3) |
(3.8) |
(4.0) |
(3.4) |
(3.5) |
|
|
{2.2} |
{2.4} |
{2.5} |
{2.0} |
{2.2} |
{2.6} |
{3.1} |
{2.5} |
{3.0} |
{2.6} |
{2.6} |
|
Nigerseed
|
0.57 |
0.45 |
0.42 |
0.42 |
0.44 |
0.33 |
0.39 |
0.26 |
0.33 |
0.34 |
0.21 |
|
|
(1.0) |
(0.7) |
(0.8) |
(0.7) |
(0.9) |
(0.7) |
(0.8) |
(0.7) |
(0.5) |
(0.6) |
(0.3) |
|
|
{0.8} |
{0.6} |
{0.6} |
{0.5} |
{0.6} |
{0.5} |
{0.6} |
{0.5} |
{0.4} |
{0.4} |
{0.2} |
|
Safflower
|
1.14 |
1.35 |
0.36 |
0.73 |
0.78 |
0.60 |
0.66 |
0.54 |
0.40 |
0.52 |
0.57 |
|
|
(2.0) |
(2.2) |
(0.7) |
(1.2) |
(1.6) |
(1.3) |
(1.3) |
(1.5) |
(0.7) |
(0.9) |
(0.9) |
|
|
{1.5} |
{1.7} |
{0.5} |
{0.9} |
{1.1} |
{1.0} |
{1.0} |
{1.0} |
{0.5} |
{0.6} |
{0.7} |
|
Castor
|
3.12 |
3.60 |
3.32 |
3.36 |
3.06 |
3.52 |
2.61 |
1.71 |
3.19 |
3.17 |
3.38 |
|
|
(5.6) |
(5.8) |
(6.5) |
(5.6) |
(6.1) |
(7.8) |
(5.2) |
(4.7) |
(5.3) |
(5.2) |
(5.2) |
|
|
{4.2} |
{4.4} |
{4.7} |
{4.2} |
{4.5} |
{5.6} |
{3.8} |
{3.1} |
{4.0} |
{3.9} |
{3.9} |
|
Linseed
|
0.87 |
0.93 |
0.72 |
0.80 |
0.72 |
0.60 |
0.63 |
0.53 |
0.59 |
0.51 |
0.42 |
|
|
(1.6) |
(1.5) |
(1.4) |
(1.3) |
(1.4) |
(1.3) |
(1.3) |
(1.5) |
(1.0) |
(0.8) |
(0.6) |
|
|
{1.2} |
{1.1} |
{1.0} |
{1.0} |
{1.1} |
{1.0} |
{0.9} |
{1.0} |
{0.7} |
{0.6} |
{0.5} |
|
B.
Secondary Sources |
19.00 |
19.70 |
19.20 |
19.90 |
18.00 |
18.00 |
19.30 |
18.60 |
19.90 |
20.30 |
22.10 |
|
|
{25.4} |
{24.2} |
{27.2} |
{25.0} |
{26.4} |
{28.6} |
{27.8} |
{33.9} |
{24.7} |
{25.1} |
{25.4} |
|
Coconut
|
4.20 |
4.50 |
4.50 |
4.90 |
4.50 |
5.60 |
5.50 |
5.50 |
5.50 |
5.50 |
4.20 |
|
|
(22.1) |
(22.8) |
(23.4) |
(24.6) |
(25.0) |
(31.1) |
(28.5) |
(29.6) |
(27.6) |
(27.1) |
(19.0) |
|
|
{5.6} |
{5.5} |
{6.4} |
{6.2} |
{6.6} |
{8.9} |
{7.9} |
{10.0} |
{6.8} |
{6.8} |
{4.8} |
|
Cottonseed
|
4.00 |
4.80 |
4.20 |
4.80 |
5.00 |
4.60 |
4.70 |
4.30 |
4.30 |
4.30 |
5.70 |
|
|
(21.1) |
(24.4) |
(21.9) |
(24.1) |
(27.8) |
(25.6) |
(24.4) |
(23.1) |
(21.6) |
(21.2) |
(25.8) |
|
|
{5.4} |
{5.9} |
{6.0} |
{6.0} |
{7.3} |
{7.3} |
{6.8} |
{7.8} |
{5.3} |
{5.3} |
{6.5} |
|
Ricebran
|
4.50 |
4.60 |
4.80 |
5.00 |
5.00 |
4.80 |
5.50 |
6.00 |
6.00 |
6.20 |
6.80 |
|
|
(23.7) |
(23.4) |
(25.0) |
(25.1) |
(27.8) |
(26.7) |
(28.5) |
(32.3) |
(30.2) |
(30.5) |
(30.8) |
|
|
{6.0} |
{5.7} |
{6.8} |
{6.3} |
{7.3} |
{7.6} |
{7.9} |
{10.9} |
{7.4} |
{7.7} |
{7.8} |
|
Solvent
Extracted Oils |
4.90 |
4.30 |
4.20 |
3.70 |
2.50 |
2.00 |
2.80 |
2.00 |
3.30 |
3.50 |
4.10 |
|
|
(25.8) |
(21.8) |
(21.9) |
(18.6) |
(13.9) |
(11.1) |
(14.5) |
(10.8) |
(16.6) |
(17.2) |
(18.6) |
|
|
{6.6} |
{5.3} |
{6.0} |
{4.6} |
{3.7} |
{3.2} |
{4.0} |
{3.6} |
{4.1} |
{4.3} |
{4.7} |
|
Tree
& Forest Origin |
1.40 |
1.50 |
1.50 |
1.50 |
1.00 |
1.00 |
0.80 |
0.80 |
0.80 |
0.80 |
1.30 |
|
|
(7.4) |
(7.6) |
(7.8) |
(7.5) |
(5.6) |
(5.6) |
(4.1) |
(4.3) |
(4.0) |
(3.9) |
(5.9) |
|
|
{1.9} |
{1.8} |
{2.1} |
{1.9} |
{1.5} |
{1.6} |
{1.2} |
{1.5} |
{1.0} |
{1.0} |
{1.5} |
|
Total
(A+B) |
74.68 |
81.27 |
70.58 |
79.60 |
68.15 |
62.99 |
69.46 |
54.84 |
80.60 |
80.97 |
87.11 |
|
Figures
in brackets are percentages to total edible oil production |
|||||||||||
|
Figures
in curly brackets are percentages to the respective sub-group viz
primary sources and secondary sources |
|||||||||||
|
Source:
Agricultural Statistics At a Glance2006-07, Ministry of
Agriculture |
|||||||||||
The
slow pace of growth in the production of edible oils in the domestic
economy has not been able to meet the domestic demand, which has been
escalating continuously due to increased population, growing incomes.
Edible oil consumption pattern in the country indicates that varieties of
oils used as well as quantity consumed have a regional distribution
corresponding to varied culinary tastes and preferences across different
states. Though in recent years with the advancements of technology
(rendering oils colourless, odourless and tasteless), unconventional oils
like palm oil or its liquid fraction (palmolein),
soyabean oil, etc. have started gaining preference, mainly due to health
concerns. Palm oil (mainly imported) and soybean oil has accounted for
almost half of
|
Table
4: Consumption of edible oil between 1993-94 and 2004-05 |
|||||
|
Edible
oil |
Year |
Per
Capita Quantity (kg) |
Percentage
of Households |
||
|
Rural |
Urban |
Rural |
Urban |
||
|
Groundnut
oil |
93-94 |
0.12 |
0.24 |
30.4 |
40 |
|
99-00 |
0.12 |
0.23 |
24.8 |
31.8 |
|
|
2004-05 |
0.07 |
0.16 |
13.8 |
20.9 |
|
|
Mustard
oil* |
93-94 |
0.17 |
0.15 |
50.7 |
35 |
|
99-00 |
0.24 |
0.25 |
50.1 |
35.7 |
|
|
2004-05 |
0.22 |
0.2 |
51.1 |
37.6 |
|
|
Vanaspati |
93-94 |
0.03 |
0.06 |
11.6 |
21.3 |
|
99-00 |
0.04 |
0.06 |
13.5 |
19.1 |
|
|
2004-05 |
0.03 |
0.05 |
13.7 |
16 |
|
|
Edible
oil (other)** |
93-94 |
0.05 |
0.11 |
NA |
NA |
|
99-00 |
0.09 |
0.17 |
21.5 |
28.7 |
|
|
2004-05 |
0.14 |
0.25 |
31.9 |
41.5 |
|
|
Edible
oil: All |
93-94 |
0.37 |
0.56 |
97.8 |
92.5 |
|
99-00 |
0.5 |
0.72 |
98 |
94.6 |
|
|
2004-05 |
0.48 |
0.66 |
98 |
94.5 |
|
|
*Includes
margarine in 1999-2000, **excluding coconut oil, NA: Not Available |
|||||
|
Source:
NSS 61th Round, Ministry of Statistics and Programme
Implementation |
|||||
Per
capita consumption of edible oil has definitely been rising over the
eleven years from 1993-94 to 2004-05. Table 4 shows the extent of increase
to be as much as 30 per cent in rural
Since there has been a continuous excess of demand over domestic supply of edible oils, import of edible oils has been resorted to for more than two decades to make this item of mass consumption easily available to consumers at reasonable prices. In pursuance of the policy of liberalisation, there have been progressive changes in the import policy in respect of edible oils during the past few years. Edible oil, which was in the negative list of imports, was first decanalised partially in April 1994. This was followed by enlargement of the basket of oils under Open General License (OGL) import in March 1995, subject to 65 per cent of basic custom duty. Subsequently, imports of other edible oils were also placed under OGL, except that of coconut oil. This facilitated easy access to imports of edible oils, resulting in increasing domestic availability of edible oils.
Buoyancy in the edible oil imports has been observed in late 1990s in spite of good harvests of oilseeds in the country, due to increasing demand in the domestic economy. However, this wasn’t the only reason for this resilience in the imports. Declining edible oil production for the three years, during 1999-2000 to 2002-03, on account of huge fall in the domestic edible oilseeds production, resulted in increasing dependence on their imports. Imports as a percentage of net domestic availability surged from 27.4 per cent in 1998-99 to 41.1 per cent in 1999-2000 and further to 48.3 per cent in 2002-03 (Table 5). This resulted in increasing burden on foreign exchequer of the country as imports of edible oil increased from Rs 7,589 crore in 1998-99 to Rs 11,683 crore in 2003-04. However, the sharp improvement in domestic production of oilseeds and therefore of the edible oil output in the following years have helped to moderate the extent of dependence of the country on the imported oils during 2002-03 to 2004-05.
|
Table
5: Snapshot of Edible Oils Status and |
||||||
|
(lakh
tonnes) |
||||||
|
|
Production |
Exports
and |
Net
Domestic (2)-(3) |
Imports |
Actual Consumption |
Import (5)/(6) |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
|
1995-96 |
74.7 |
10.0 |
64.7 |
11.6 |
76.3 |
15.2 |
|
1996-97 |
81.3 |
10.0 |
71.3 |
14.1 |
85.3 |
16.5 |
|
|
(8.8) |
(0.0) |
(10.2) |
(21.1) |
(11.8) |
|
|
1997-98 |
70.6 |
10.0 |
60.6 |
12.7 |
73.2 |
17.3 |
|
|
(-13.2) |
(0.0) |
(-15.0) |
(-10.0) |
(-14.2) |
|
|
1998-99 |
79.6 |
10.0 |
69.6 |
26.2 |
95.8 |
27.4 |
|
|
(12.8) |
(0.0) |
(14.9) |
(107.1) |
(30.8) |
|
|
1999-2000 |
68.2 |
8.0 |
60.2 |
42.0 |
102.1 |
41.1 |
|
|
(-14.4) |
(-20.0) |
(-13.6) |
(60.0) |
(6.6) |
|
|
2000-01 |
63.0 |
8.0 |
55.0 |
41.8 |
96.8 |
43.2 |
|
|
(-7.6) |
(0.0) |
(-8.6) |
(-0.5) |
(-5.2) |
|
|
2001-02 |
69.5 |
8.0 |
61.5 |
43.2 |
104.7 |
41.3 |
|
|
(10.3) |
(0.0) |
(11.8) |
(3.5) |
(8.2) |
|
|
2002-03 |
54.8 |
8.2 |
46.6 |
43.7 |
90.3 |
48.3 |
|
|
(-21.0) |
(2.5) |
(-24.1) |
(1.0) |
(-13.7) |
|
|
2003-04 |
80.6 |
9.2 |
71.4 |
52.9 |
124.3 |
42.6 |
|
|
(47.0) |
(12.2) |
(53.1) |
(21.2) |
(37.7) |
|
|
2004-05 |
81.0 |
8.5 |
72.5 |
45.4 |
117.9 |
38.5 |
|
|
(0.5) |
(-7.6) |
(1.5) |
(-14.1) |
(-5.2) |
|
|
2005-06* |
87.1 |
8.0 |
79.1 |
41.8 |
120.9 |
34.5 |
|
|
(7.6) |
(-5.9) |
(9.2) |
(-8.1) |
(2.5) |
|
|
*
3rd Advance Estimates (released on 05-05-2006); Figure
in the brackets are growth rates over the previous year. |
||||||
|
Source:
Agricultural Statistics At A Glance 2006-07, Ministry of
Agriculture |
||||||
Free
imports (since 1994) have further lowered the entry barrier to the
industry as crude or refined oil can be imported, packed and distributed
doing away with the need of having manufacturing facility in the domestic
market. However, in order to avoid large imports of edible oils to the
extent possible and to harmonise the interests of domestic oilseeds
growers, consumers and processors, duty structures on imports have been
reviewed from time to time (Annexure II).
Composition
of Imports
A glance at the composition of imports (Table 6) reveals that palm oil and its products have accounted for over 65 per cent of total edible oil imports in 2001-02, which has reduced to 58 per cent in 2005-06 to. On the other hand, share of soft oils has risen from 33.8 per cent to around 42 per cent during the same period. According to statistics provided by the Solvent Extractions Association of India (SEA), total imports of edible oil during November–September, 2006-07 (11 months), has augmented by 11 per cent to 4.2 lakh tonnes compared to 3.8 lakh tonnes in the same period last year on account of lower domestic oilseeds production witnessed in 2006-07 (Table 6).
Crude palm oil (CPO) import has jumped to 2.6 lakh tonnes from around 2 lakh tonnes during the same period, due to reduction of import-duty on CPO from 80 per cent to 45 per cent at present. Similarly import of sunflower oil is more than doubled due to reduction of duty from 75 per cent to 40 per cent. Palm oil products’ (CPO, RBD palmolein, crude palmolein and crude palm kernel oil) import share has further increased to 2.8 lakh tonnes (66 per cent) from 2.2 lakh tonnes (57 per cent), while soft oil import has reduced to 1.4 lakh tonnes (34 per cent) from 1.6 lakh tonnes (43 per cent) during November 2006 to September 2007 compared to the same period of last year. Within soft oil, crude soybean oil import reduced to 1.2 lakh tonnes from 1.5 lakh tonnes due to disparity compared to CPO, while sunflower oil import has increased to 192,795 tonnes from 90,843 tonnes.
|
Table
6: Import Trend of Edible Oils |
|||||||||||
|
|
(Tonnes) |
||||||||||
|
Oil
Year |
Palm
Oil |
Soft
Oil |
Total |
||||||||
|
|
Crude |
|
Crude |
Soyabean |
Sunflower |
Coconut |
Refined |
Canola/ |
Refined |
||
|
RBD |
Palm |
Crude |
Palm |
Oil |
Oil |
Oil |
Soybean |
Rape |
Sunflower |
||
|
Palmolein |
Oil |
Olein |
Ker.Oil |
(degummed) |
|
|
Oil |
Oil |
Oil |
||
|
2001-02 |
118,895 |
1,891,538 |
920,015 |
|
2,800 |
1,475,531 |
2,504 |
3,499 |
10,400 |
|
4,425,182 |
|
2002-03 |
319,379 |
2,151,294 |
1,261,568 |
77,650 |
94,600 |
1,167,723 |
7,701 |
28,994 |
5,540 |
|
5,114,449 |
|
2003-04 |
796,846 |
2,059,579 |
491,943 |
64,349 |
75,822 |
890,695 |
2,029 |
15,324 |
|
|
4,396,587 |
|
2004-05 |
422,735 |
2,360,573 |
186,684 |
32,558 |
5,018 |
2,001,745 |
7,291 |
25,003 |
|
|
5,041,607 |
|
2005-06 |
113,491 |
2,372,681 |
55,804 |
26,840 |
100,843 |
1,703,360 |
22,307 |
20,457 |
|
1,050 |
4,416,833 |
|
Nov-Sept 2005-066 |
106,992 |
1,982,418 |
51,807 |
24,331 |
1,480,907 |
90,843 |
21,307 |
20,457 |
|
1,050 |
3,780,112 |
|
Nov-Sept 2006-07 |
102,502 |
2,624,632 |
39,747 |
8,922 |
1,225,010 |
192,795 |
10,996 |
9,120 |
|
|
4,213,724 |
|
Source:
Solvent Extractors' Association of |
|||||||||||
International
Market
World production of edible oils has grown at a compound annual growth rate (CAGR) of 6.1 per cent between 2001-02 and 2006-07. Consumption of edible oil, during the same period, has risen at a CAGR of 5.9 per cent. Imports have increased even faster at a CAGR of 7.9 per cent and are likely to continue their upward trend to reach in the future as well (Table 7).
|
Table
7: International Vegetable Oil Scenario |
||||||
|
(million
tonnes) |
||||||
|
|
2001- 02 |
2002- 03 |
2003- 04 |
2004- 05 |
2005- 06 |
2006- 07 |
|
Total |
92.87 |
95.76 |
102.06 |
111.78 |
118 |
121.5 |
|
Production |
|
(3.1) |
(6.6) |
(9.5) |
(5.6) |
(3.0) |
|
Total
Imports |
31.66 |
35.02 |
37.11 |
40.71 |
43.83 |
46.32 |
|
|
|
(10.6) |
(6.0) |
(9.7) |
(7.7) |
(5.7) |
|
Total
Exports |
33.07 |
35.58 |
38.92 |
42.55 |
46.6 |
48.31 |
|
|
|
(7.6) |
(9.4) |
(9.3) |
(9.5) |
(3.7) |
|
Total
Domestic |
92.01 |
95.61 |
100.4 |
108.19 |
115.03 |
121.08 |
|
Consumption |
|
(3.9) |
(5.0) |
(7.8) |
(6.3) |
(5.3) |
|
Total
Ending |
8.31 |
8.22 |
8.22 |
9.97 |
10.17 |
8.6 |
|
Stocks |
|
(-1.1) |
(0.0) |
(21.3) |
(2.0) |
(-15.4) |
|
Figures
in the bracket denote the percentage change over the previous
year. |
||||||
The Indian edible oil industry has to be contended with increasing competition from imports, the rising cost of oil seeds and the expanding demand-supply gap. Since the production of oil seeds is heavily dependent on monsoon, around 40 per cent of the demand for edible oils within the country has to be met by imports that may have to continue. A policy framework aiming towards improving the capacity utilisation of all the oilseeds processing units, encouraging research and development to upgrade the oilseeds having higher productivity and provision of various fiscal benefits to farmers to undertake increasing cultivation oilseeds, is what the minimum need at the current moment.
(*This
note has been prepared by Pallavi Oak)
References
- United States Department of Agriculture (USDA) (2007), ‘Oilseeds: world Markets and Trade’, September
- ICRA Sector Analysis, ‘The Indian Edible Oil Industry’ (2005), September
- Ministry of Agriculture, ‘Agricultural Statistics At a Glance 2005 and 2006’
- Ministry of Agriculture (2007), ‘Reports of the Commission for Agricultural Costs and Prices for the crops sown during 2006-07 season’
- Ministry of Consumer Affairs, Food and Public Distribution, ‘Annual Report 2006-07’
- Solvent
Extractors Association of
- Mruthyunjaya, et al (2005), ‘Efficiency in Indian Edible Oilseed Sector: Analysis and Implications’, Economics Research Review, Jul –Sept.
- Ministry of Statistics and Programme Implementation, National Sample Survey 61th Round.
|
Annexure
I: Oilseeds Scenario |
||||||||
|
Year |
Area |
Production |
Yield |
Area |
Production |
Yield |
||
|
Million |
Million |
Kg.
per |
Annual
Variation in Per
cent |
|||||
|
1950-51 |
10.73 |
5.16 |
481 |
|
|
|
||
|
1951-52 |
11.69 |
5.03 |
430 |
8.9 |
-2.5 |
-10.6 |
||
|
1952-53 |
||||||||