Edible Oil

Paving the Path to make India Edible Oil Self-Reliance

Edible Oil Scenario

The Vital Role of Edible Oils in the National Economy

India is a major global producer of oilseeds, accounting for around 5-6% of global production. According to the Ministry of Agriculture's 1st Advance Estimates for 2022-23, the country's oilseed output stood at 41.35 million tons. In the same financial year, exports of oil meals, oilseeds, and minor oils reached 3.46 million tons, generating ₹14,609 crores, reflecting the sector's critical role in the nation's agricultural economy.

Major Types of Oils Commonly Used in India

India grows a variety of oilseeds across different climates, including groundnut, mustard, sesame, safflower, linseed, niger seed, and castor.

Soybean and sunflower have recently gained importance, while coconut is the most significant plantation crop.

* Directorate General of Commercial Intelligence & Statistics (Ministry of Commerce)

# Based on the 1 st Advance Estimates declared by DACFW released on 27.10.2023

To mitigate food inflation, the government reduced import duties on edible oils, resulting in a record import volume of 165 lakh tonnes in 2022. By June 2024, imports had surged to 15.81 lakh tonnes, reflecting an 18% year-on-year increase. 

Domestic edible oil production averaged 110-120 lakh tonnes, with major oilseeds contributing about 70% of it and secondary sources (cotton seed, tree-borne oils, palm, and coconut) contributing the remaining.

Oilseeds Composition

Since the 1990s, India has seen a significant increase in edible oil imports, driven by rising consumption in processed and fast food sectors. Domestic consumption patterns are shifting towards greater use of mustard, soybean, and groundnut oils. 

Over the past five years, groundnut oil has constituted approximately 30% of domestic edible oil production, followed by mustard and soybean oils, each contributing around 20%, and sunflower oil at about 11%. The majority of oilseed output, around 70%, originates from nine key states. 

According to the ICAR-Indian Institute of Oilseed Research, mustard oil is predominant in the North and East, while sunflower oil is favored in the West and South, with higher groundnut oil consumption in the South. The National Institute of Nutrition reports a per capita availability of edible oils at 20-50 grams per day, with annual consumption estimated at 7.9 kg, surpassing recommended levels. 

To achieve self-sufficiency and mitigate import dependency, enhancing domestic oilseed production is essential.

Oilseeds Output Scenario

Sunflower oil production has sharply decreased from 12-15 lakh tonnes in the mid-2000s to 1.7 lakh tonnes in 2023-24, according to the Third Advance Estimates (June 2024). Current major oilseeds include mustard (131 lakh tonnes), soybean (132 lakh tonnes), and groundnut (102 lakh tonnes), with sunflower at only 2 lakh tonnes. Total oilseed production has reached approximately 420 lakh hectares, but sunflower acreage has declined due to cheaper imported oils.

A significant share of domestic edible oil, notably palm oil, is used in commercial sectors such as restaurants and processed foods. Expanding sunflower cultivation is crucial to counteract this decline. While soybean production has risen with increased acreage and higher yields, improving sunflower yields and enhancing production practices are essential for boosting efficiency and sustaining oilseed output.

Reference

1. Government of India https://dfpd.gov.in/Home/ContentManagement?Url=edible_oil_scenario.html&ManuId=3&language=1 

2. Newspaper article “being self-reliant in edible oil” by Amarender Reddy and Tulsi Lingareddy think.bl.5