India increases production of oilseeds to reduce imports of vegetable oils

Indian Prime Minister Narenda Modi announced that the country is launching a program to develop its own production of oilseeds, which will meet the needs for food oils and lead to a reduction in their imports, for which 110 billion rupees or.1.48 billion have been allocated.

India is the world's largest importer of vegetable oils, spending an average of 8 8.5-10 billion annually, so any reduction in imports will significantly affect world oil prices.

The country consumes approximately 24 million tons of food oils, of which less than half is produced independently, and buys most, in particular palm oil – in Malaysia and Indonesia, soy – in Brazil and Argentina, sunflower – in Ukraine and Russia.

India exports agricultural products such as rice and sugar, but its own production of oilseeds is 6 times less than that of rice and wheat. Therefore, the government decided to invest more than Rs 110 billion through the National oilseeds mission to provide farmers with everything they need, including the best seeds and technologies. This will reduce the country's dependence on imports and meet the needs for food oils.

India in 2019 increased the import of vegetable oils to 15.67 million tons, although two decades ago it was only 4 million tons. in 2020, against the background of quarantine, the import of vegetable oils decreased to 13.76 million tons, in particular palm oil - from 10.04 to 7.51 million tons.

At the same time, the import of sunflower oil in 2020 increased from 2.44 to 2.51 million tons, including from Russia – from 170 to 451 thousand tons, while from Ukraine it decreased from 2.07 to 1.86 million tons.

Imports of soybean oil due to its lower price than sunflower oil also increased from 3.19 to 3.74 million tons, including supplies from Argentina increased from 2.36 to 2.8 million tons, which is the highest in the last 4 years.

According to the USDA, the area of oilseeds sown in India has grown by only 3% over the past 3 years. But the new program will be aimed at increasing the production of palm oil, which in the future can significantly reduce world prices for these products, especially against the background of the EU's refusal to use palm oil in the production of biofuels.

Due to high palm oil prices, the Government of India in June 2021 reduced the import duty on crude palm oil (SRO) by 5% for the period June 30 – September 30, and also lowered the import duty on refined palm oil and oleic products.