Here’s why skyrocketing prices of vegetable oil is a matter of concern for the NaMo Govt!

As if buying vegetables wasn’t enough for burning holes in our pockets, we have our vegetable oils to worsen the situation! Well, not literally, but the sky rocketing prices of edible oil has certainly hurt our monthly budgets. And just like they have hiked up our monthly expenditures, economists fear, soaring vegetable oil prices could result in India’s vegetable oil import bill to increase to $14 billion from the current bill of $10 billion.

Experts expect edible oil imports to go up as the oil seed production in states such as Gujarat, Madhya Pradesh, Maharashtra, Andhra Pradesh and Tamil Nadu is projected to decline due to deficit rains this year.

“If we look at and compare the figures for the last five years the vegetable oil imports have reached their highest level in 2014-15. During the same year, the country experienced a 12% rainfall deficit which resulted in significant decline in domestic oilseed production. The deficit in rainfall so far for the current fiscal year as per the latest available information is 12%, therefore assuming that the production of oil seeds for 2015-16 remains at the level of 2014-15 and anticipating a rise in demand, vegetable oils imports would reach around $ 14 billion for 2015-16 which was actually around $10 billion last year,” said DS Rawat, general secretary of ASSOCHAM.

He added that the growth in the domestic production of oilseeds is far below than the increasing demand in the country. “A vibrant and efficient processing sector is a pre-requisite for the optimum growth and development of oilseed economy. India’s oilseed processing sector has been plagued by a slew of technological and policy issues culminating in the existence of a processing sector low in efficiency and capacity utilization. If the oilseed cultivators have to be linked in an economically viable and sustainable manner to the oilseed value chain, the role of oilseed processing units cannot be underestimated," he explained

Experts have attributed the poor production of oilseeds to low and unstable yields of most oilseed crops, and uncertainty in returns to investment, which result from the continuing cultivation of oilseeds in rainfed and high risk production environments, “These are the factors leading to this situation of wide demand-supply gap,” said Rawat.

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