The Soybean Processors Association of India (SOPA) said that India should build a buffer stock of edible oils equal to 10% of the country's demand. This reserve stock can be released into the market whenever there is a supply shortage due to any reason helping the government in lowering prices.
According to the association, the lack of edible oil supply from imports because of the war between Russia and Ukraine will be around 2 lakh tones of sunflower oil per month.
The association has suggested the government regarding the increase in edible oil supply and lowering pricing.
According to SOPA, the undersupply can be maintained by increasing soybean and palm oil imports. "The all-time high mustard crop will somewhat balance the shortfall in sunflower oil in the next six months," said DN Pathak, executive director of SOPA. "The additional 40 lakh tone of the mustard crop would give roughly 15 lakh tone of additional mustard oil."
SOPA has proposed working with Argentina and Indonesia to cut down the export taxes on soybean oil and palm oil to bring down edible oil prices.
"The government should strictly implement storage control orders on soybeans and mustard to make sure that the oilseeds are available for crushing rather than being cornered by stockists and traders for hoarding and profiteering," Pathak added.
Pathak expressed his hope for normal supply to continue in the next 3 months and said that the oil import lobby has asked for duty reduction on canola oil. He pointed out that it is not necessary to import canola oil at low duty in these circumstances as it will directly inflict the farmers and domestic mustard oil industry.
He continued supporting his argument by saying that canola oil can be sold as mustard oil because the two oilseeds come from the same family. He said that it’s easy to adulterate mustard oil with canola oil. He informed that any further reduction in edible oils duties is not in the long-term interest of the country and will be a knee-jerk reaction.
He claimed that importing soybean meal would benefit one business at the expense of another and that millions of farmers would be discouraged from planting soybeans.
"We are experiencing a shortage in edible oil supply as a result of our policy of relying on imports and failing to make enough efforts to increase oilseed output. If we import soybean meal as well, we'll be opening up yet another large door for future imports," he said.
