Edible oil

Edible oil

Subject: Economy

Section   External Sector

Context:

A ban on crude palm oil could have impacted India much more as India meets 85% of its requirement of crude palm oil via imports, and the bulk of the imports are from Indonesia and Malaysia.

Details:

• India’s vegetable oil economy is the world’s fourth largest after the USA, China & Brazil and the largest edible oil importer.
• India imports more than 55% of its edible oil consumption annually either in crude or refined form.
• Malaysia and Indonesia account for more than 90% of the total palm oil trade.
• Crude palm and soybean oil are imported from mainly Malaysia, Indonesia, Argentina and Brazil; these items had shares of 62% and 21% in the total edible oil imports respectively.
• It depends on Ukraine for sunflower oil, which had a 14% share in the total edible oil import basket in 2020-21.

Concept:

National Mission on Edible Oils – Oil Palm (NMEO-OP):

• A centrally sponsored scheme to achieve self-sufficiency in edible oil production.
• Aims and Objectives of the scheme:
  • Achieve self-reliance in edible oil.
  • Harness domestic edible oil prices that are dictated by expensive palm oil imports.
  • To raise the domestic production of palm oil by three times to 11 lakh MT by 2025-26.
• Key features of the scheme:
  • The special emphasis of the scheme will be in India’s north-eastern states and the Andaman and Nicobar Islands due to the conducive weather conditions in the regions.
  • Under the scheme, oil palm farmers will be provided financial assistance and will get remuneration under a price and viability formula.

Status of edible oil:

• Palm oil-According to data from the United States Department of Agriculture, nearly 85% of palm oil is produced in just two countries – Indonesia and Malaysia. In 2019, Indonesia produced 42.5 million tons, 58% of global production, while 19 million tons came from Malaysia – 26% of the global supply. Other major palm oil producers include Thailand, Colombia and Nigeria.
• Soybean Oil- China>USA>Brazil>Argentina>EU
• Sunflower oil-world production of sunflower oil is around more than 18 million tonnes, led by Ukraine and Russia– as the leading producers accounting together for 53% of the world total.