India is perhaps the biggest market for edible oil. In value terms vegetable oil imports are next only to crude and gold. It is the highest for any food commodity. India’s import dependence in this has worsened to over 70%.

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State of Indian Palm Oil:

• Oil palm crop is one of the highest oil (palm oil) yielding crops among the all perennial crops. Oil palm tree produces edible palm-oil as well as palm kernel-oil.
• In cooking oil, India depends on imports for two-thirds of its requirement.
• Domestic production meets three quarters of its annual requirement of 32 million tonnes because of initiatives taken by the present and previous governments
• Annual imports during the past three years have averaged 14.82 million tonnes at $9.43 billion.
• Though palm oil has a high proportion of unhealthy saturated fats-45% compared to 6% in mustard oil-there is no way India can affordably meets its growing needs without relying on it.
• Annual imports of crude palm oil during the past three years have averaged 6.76 million tonnes, giving it a 46% share of the commodity’s imports.
• Soybean and sunflower oils follow at some distance.

Issues facing palm oil industry in India:

• Self-sufficiency is almost impossible with oilseeds because there is not enough land available.
• Currently, it covers 3.45 lakh hectares out of a potential area of 19.33 lakh hectares, nearly half of it in Andhra Pradesh.
• Uncertainty of income deters smallholder farmers from investing in a long-gestation crop, which yields fruit after three years of planting for 27 years.
• Instable prices: The current monthly price of Fresh Fruit Bunches (FFB) in Andhra and Telangana varies between Rs 7,200 and Rs 8,000 a tonne. A year ago, it went down to Rs 6,000. For farmers to make a profit, the price should be Rs 9,500 a tonne
• Low productivity also haunts the industry. India produces five tonnes of FFB per hectare on average.
• Low yields translate into low capacity utilisation of the processing plants, which adds to the cost.
• India’s average palm oil yield is 0.88 tonnes per hectare, compared to Malaysia’s four tonnes and Andhra’s two tonnes.
• The East Asian country has the advantage of daily rainfall. In India, irrigation is a big cost.
• As in sugarcane, oil palm farmers are required to supply to a mill in the vicinity which must pay the price fixed by state governments.
• In the north-east, the condition of the roads is such that FFB often cannot be brought to the mills within 24 hours and there is much oozing of oil owing to bumpy rides.

Measures needed:

• To make a dent in the import bill, India must increase palm oil production because oil palms have the highest productivity at 4,000 kg of oil per hectare. In contract, mustard, which has a high oil content of 35-42%, yields 440-500 kg of oil per hectare at current levels of productivity.
• The government must pay farmers the difference between the normative cost and the actual purchase price.
• Support to farmers for planting materials, inter cropping & maintenance cost for gestation period (4 yrs), bore well, drip irrigation, harvesting tools.
• Corporations should be allowed to do oil palm cultivation as they can bear financial risks and do farming scientifically.
• Oil palm would have to be declared a plantation crop. This would lift the bar on companies from buying agricultural land.
• The Commission on Agricultural Costs and Prices (CACP), which fixes minimum support prices, had recommended a mix of smallholder farms and corporate plantations in 2012.
• Small farmers can give the palms better care. Processing companies should do a better job of extending services to them
• A ceiling on other vegetable oil import will reduce the quantum of arrivals and support domestic producers. Ceiling should come with the provision to review it every 6 months, depending on the exigencies of the situation.
• Import duties should be varied dynamically. It should be fixed in a way so that imported oils are not cheaper than the MSP for domestic oils.
• Special focus for promotion of oil palm in all NE states.
• To meet the planting materials requirement for new plantation both from indigenous and imported sources.
• Capacity building of farmers and extension officials.
• Assured procurement of FFBs through processors.
• Supporting oil palm growers through Market Intervention Scheme (MIS) to provide remunerative prices of FFBs as and when international CPO price fall below $ 800 per MT.

Conclusion:

Oil palm crop provides the excellent substitute of importing the oil. There is a need to help farmers of the country to achieve self-sufficiency in pulses and hope that they would repeat the “success” in oilseeds.