Over the past decades, per capita consumption of edible oil in the country has seen a dramatic rise, reaching 19.7 kg/year. This surge in demand has significantly outpaced domestic production, leading to a heavy reliance on imports to meet both domestic and industrial needs, according to a report titled "Pathways and Strategies for Accelerating Growth in Edible Oils Towards the Goal of Atmanirbharta."
The report was released by Suman Bery, NITI Aayog Vice-Chairman, in the presence of Prof. Ramesh Chand, Member, NITI Aayog, along with senior officials from the Ministry of Agriculture & Farmers Welfare (MoA&FW), ICAR institutes, and industry players. The report was presented by Dr. Neelam Patel, Senior Advisor (Agriculture), NITI Aayog.
According to the report, India imported 16.5 million tonnes (MT) of edible oils in 2022-23, with domestic production fulfilling only 40-45% of the country’s requirements. This situation presents a substantial challenge to the country’s goal of achieving self-sufficiency in edible oils.
The report comprehensively explores the current state of the country’s edible oil sector and its future potential. It presents a detailed roadmap to address existing challenges, focusing on bridging the demand-supply gap and developing new approaches to attain self-sufficiency. Under a Business-As-Usual (BAU) scenario, the national supply of edible oil is projected to increase to 16 MT by 2030 and 26.7 MT by 2047.
The report considers three distinct approaches for demand forecasting to gain a multifaceted understanding of future edible oil needs: (1) ‘Static/Household Approach’ utilizing population projections and baseline per capita consumption data, assuming a short-term static pattern in consumption behavior; (2) ‘Normative Approach’ based on the recommended healthy intake levels established by the ICMR-National Institute of Nutrition (ICMR-NIN); and (3) ‘Behavioristic Approach’ recognizing the potential for behavioral shifts in food consumption patterns due to evolving lifestyles and dietary habits driven by increasing income levels and price fluctuations under two scenarios.
In Scenario I, where consumption is capped at 25.3 kg per capita (the average of developed countries), the demand-supply gap is projected to be 22.3 MT by 2030 and 15.20 MT by 2047. In Scenario II, which considers a higher consumption level of 40.3 kg per capita (comparable to the USA), the gap widens to 29.5 MT by 2030 and 40 MT by 2047. In the BAU situation, the country’s edible oil demand will reach Scenario-I by 2028 and Scenario-II by 2038 where under the high-income growth circumstance, assuming an estimated 8% annual growth.
The country's edible oil demand is expected to reach Scenario-I as early as 2025, a three-year advancement compared to the BAU situation and Scenario-II by 2031, seven years earlier than anticipated in the BAU situation, showcasing even higher demand due to accelerated economic growth.
Based on the ‘Static/Household Approach’, projections indicate a smaller demand-supply gap of 14.1 MT and 5.9 MT by 2030 and 2047, respectively. However, if the per capita consumption recommended by the ICMR-NIN is followed, the country is projected to have a surplus of 0.13 MT and 9.35 MT by 2030 and 2047 respectively. To achieve self-sufficiency in this sector, the report suggests several strategic interventions to bridge the existing gap and ensure long-term sustainability. The proposed strategy is structured across three key pillars: (i) Crop Retention and Diversification, (ii) Horizontal Expansion, and (iii) Vertical Expansion.
‘Horizontal Expansion Strategy’ aims to strategically increase the area dedicated to cultivating edible oil crops. This strategy seeks to bring more land under cultivation for specific oilseeds. Potential avenues for achieving self-sufficiency include the utilization of rice fallow lands for high-yielding oilseed crops and highly suitable wastelands for transformation through palm cultivation along with promoting crop retention and diversification efficiently in the potential regions. This might necessitate a cost-benefit analysis to determine the viability of production compared to the alternative crops.
‘Vertical Expansion Strategy’ focuses on enhancing the yield of existing oilseed cultivation. This can be achieved through improved farming practices, better-quality seeds, and advanced production technologies. Further, the ‘state-wise quadrant approach’ outlined in the report offers a valuable tool for achieving “Atmanirbharta” in edible oils. The report identifies state clusters using four quadrants [i.e., (i) High Area-High Yield (HA-HY), (iii.) High Area-Low Yield (HA-LY), (iii) Low Area-High Yield (LAHY), and (iv) Low Area-Low Yield (LA-LY)] for the edible oil crops cultivated across the country.
State clusters with high cultivation area and yield (HA-HY) may focus on improving efficiency and adopting best practices from leading global producers. Conversely, states with high area but low yield (HA-LY) require interventions aimed at vertical expansion (i.e., enhancing yield). In low-area, high-yield states (LA-HY), the focus might shift towards horizontal expansion, expanding cultivation while maintaining efficiency. Finally, areas with low area and low yield (LA-LY) need to focus on both horizontal and vertical expansion.
By strategically targeting these clusters and implementing tailored interventions, the country can maximize its production potential and effectively address the near-term challenges posed by potential consumption increases. The strategic interventions recommended in this report, offer a vibrant path towards reducing import dependence. The report notes that by implementing the strategic interventions, the country has the potential to significantly increase the domestic edible oil production by 43.5 MT. This substantial increase has the potential to not only bridge the import gap but also position the country on a trajectory toward self-sufficiency in edible oils.
The report says strategically retaining and diversifying oilseed crops and focusing on areas potentially lost to cereal cultivation could boost the country's edible oil production by 20% in nine states, adding 7.36 MT of oilseed production and reducing import dependence by 2.1 MT.
Rice fallow areas across the country reveal a promising opportunity for horizontal expansion in oilseed cultivation. Utilizing one-third of the rice fallow area in ten states for oilseed cultivation could increase oilseed production by 3.12 MT and reduce import reliance by 1.03 MT. Bridging the yield gap from 12% in castor to 96% in sunflower through widespread adoption of improved technologies and effective management practices, i.e., vertical expansion could increase the country's domestic oilseed production by 17.4 MT. This would reduce edible oil imports by 3.7 MT.
Palm oil alone, through targeted expansion, can potentially increase a staggering 34.4 MT of edible oil, making a substantial stride towards closing the existing demand-supply gap. The effort should focus on capitalizing on the untapped potential identified by ICAR-IIOPR in the 284 districts, which estimates an additional 2.43 Mha of land across the country for oil palm cultivation. Furthermore, tactically utilizing two-thirds of the highly suitable areas of wastelands located in ICAR-IIOPR identified districts (i.e., 6.18 Mha) presents a significant opportunity for further horizontal expansion.
Rice bran, offers an estimated potential of 1.9 MT of edible oil, with 0.85 MT currently untapped. Similarly, cottonseed presents a potential for an additional 1.4 MT of edible oil production, contributing to a further 9.7% reduction in the country's edible oil demand-supply gap or import dependence.
Overall, the proposed strategic interventions could achieve projected edible oil supplies of 36.2 MT and 70.2 MT, by 2030 and 2047 respectively. The potential gain in edible oil production estimated from the proposed strategic interventions combined with the existing production level is anticipated to achieve self-sufficiency with the recent growth trend (CAGR of 3%) in all scenarios except for the most demanding scenario (i.e., Behavioristic Approach Scenario-II) in the near term.
To meet the projected demand by the more immediate target of 2030 under this scenario, a CAGR of 5.2% would be required for the 2021-2030 period, representing a 2.2% increase from the recent growth situation. This targeted increase can be achieved through a more focused, rigorous implementation and intensive approach.
In addition to that, the report highlights that optimizing seed utilization and processing capabilities is critical to strengthening the foundation for edible oil self-sufficiency indicating that high-quality seeds alone can contribute significantly (15-20%) to increased production, potentially reaching even higher levels (45%) when combined with efficient management of other agricultural inputs.
However, the current Seed Replacement Ratio (SRR) falls short of the target of 80-85%, ranging from 25% in groundnut to 62% in rapeseed mustard, hindering overall yield improvement. The report also suggested that modernizing existing mills and strategically investing in processing infrastructure will improve efficiency and minimize waste since the country’s vegetable oil sector is characterized by many small-scale, low-technology plants with substantial excess capacity, utilizing only 30% of its edible oil refining capacity.
Since achieving self-sufficiency in edible oil is a critical national priority, to navigate this path successfully the recommendations and the way forward of this report laid down based on the valuable insights gained from a primary field survey encompassing 1,261 farmers across seven major oilseed-growing states (Rajasthan, Maharashtra, Madhya Pradesh, Uttar Pradesh, Haryana, Andhra Pradesh, and Karnataka).
The report concludes with several recommendations to achieve self-sufficiency in edible oils, including focusing on area retention of oilseeds, seed traceability and quality assurance, adoption of improved and advanced production technologies, value addition through processing and refining, effective marketing and robust market linkages, encouraging public-private partnerships, developing a dynamic trade policy for balanced growth, broadening the scope of the National Mission on Edible Oils, enhancing public awareness on recommended dietary guidelines, incentivizing and encouraging domestic oilseed consumption in the food industry.
The report further highlights that addressing disparities in oilseed yields requires a data-driven approach and robust systems to bridge regional gaps and investment in research and development is crucial for transforming the edible oil sector to ensure “Atmanirbharta” in the edible oil sector with national food security and economic stability.
