Edible oil prices to come down after this massive move by Centre

Faced with constantly rising prices of edible oil, the Centre on Wednesday (August 18) unveiled a new plan to locally increase production and productivity of vegetable oil, especially palm oil.

The National Edible Oil Mission-Oil Palm (NMEO-OP), introduced by Prime Minister Narendra Modi recently, is aimed at reducing India’s edible oil imports. It will emphasise on training and providing facilities to farmers in the north-east and the Andaman and Nicobar Islands, because conditions in these parts are favourable for growing palm trees.

Prime Minister Narendra Modi had recently said that while India has achieved self-sufficiency in wheat and paddy, the same has not happened in the case of edible oils. “India achieved new heights in agriculture exports when COVID was at its peak. Now is the time to become independent in matters of edible oil,” Modi had said recently.

The government realises that extreme dependence on imports is bad for the economy. Therefore, it wants to increase domestic production of edible oils by way of increasing area and productivity of oil palm.

India is the world’s largest consumer of vegetable oils and palm oil is a very important component of it. Besides palm, oils extracted from groundnut, sunflower, mustard, coconut, soyabean, sesame, castor etc are also consumed in India.

The Centre has allocated Rs 11,040 crore for the program, of which Rs 8,844 crore is its own share and Rs 2,196 crore will come from the states.

Also read: Indian market needs sustainable palm oil supply chain

The Modi government wants to use National Edible Oil Mission-Oil Palm to become independent in vegetable oil production. Unfortunately, the country depends on imports to meet its domestic oil demand. In 2019-20, the country’s demand for edible oil was 25 million tonnes, of which over 13 million tonnes was imported. More than 50% of the imported oil is sourced from palm trees in Indonesia and Malaysia.

The National Edible Oil Mission-Oil Palm also aims to reduce food inflation by keeping oil prices under check. The Mission is also touted as a way to increase the incomes of farmers, who will be given quality seeds and the required technology to produce quality oil.

On the economic front, the Union government recently cut duty on crude palm oil by 5%, which helped reduce vegetable oil prices to some extent.