Currently India is a net importer of edible oils. Means a large proportion of our edible oil demand (52.5%) is met through import from other countries.
- The import is in form of palm oil, soya oil, sunflower oil, etc.
- The three mentioned accounts for 99% of the import at a price of 8800 Crores.
- Net domestic availability of edible oils is 11.16 MT and imports are 13.45 MT (Agriculture statistics at a glance, 2020-21).
Now, we need to account for price rise. It might be caused due to any of the following.
1. Price surge due to decreased domestic production.
2. Due to increased import costs.
The second factor is more accountable here which is due to following reasons.
1. The droughts in Ukraine (2020–21) and South America (2021–22) affected sunflower and soybean oil supply.
2. Supply-side effects in Malaysia’s oil palm farms, where migrant workers primarily from Bangladesh and Indonesia gather fresh fruit bunches. But their out migration led to increased cost of Palm Oil.
3. Russia accounts for 78% of sunflower oil, war have caused export restrictions.
But the market is recovering and the load of oil prices on food basket is decreasing now.
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