SOPA suggests building buffer stock of edible oils

The Soybean Processors Association of India (SOPA) has suggested that India should build a buffer stock of edible oils, to the tune of 10% of the country’s demand. This reserve stock can be released in the market whenever there is crunch in supply due to any factor and will help the government in bringing down the prices. The shortage of edible oil supply from imports due to war between Russia and Ukraine would be approximately be around 2 lakh tonne of sunflower oil per month, the association said.

The association has given suggestions to the government, regarding augmenting edible oil supply and cooling down prices.
According to SOPA, this deficit can be made up by additional import of soybean oil and palm oil. “The all-time high mustard crop will partially offset the shortfall in sunflower oil in the next six months as the additional 40 lakh tonne of mustard crop will give about 15 lakh tonne of additional mustard oil, DN Pathak, executive director, SOPA said.

To cool down the prices of edible oils, the association has suggested engaging with Argentina and Indonesia to reduce their export taxes on soybean oil and palm oil, respectively. The government should strictly enforce storage control order on soybean and mustard, to ensure that the oilseeds come into the market for crushing and not cornered by stockists and traders for hoarding and profiteering,” Pathak said.

Expressing the hope for normal supplies to resume in the next three months, Pathak said that the oil import lobby has asked for duty reduction on canola oil. Under the circumstances, it is not necessary to import canola oil at low duty as it will directly affect the farmers and domestic mustard oil industry, he pointed out. “Also, canola oil may be sold as mustard oil as the two oilseeds come from the same family and it is easy to adulterate mustard oil with canola oil. Any further reduction in duties on edible oils would be a knee-jerk reaction, not in the long-term interest of the country.

Opposing the move to import GM soybean, the association felt that the suggestion for further import of GM soybean meal by some traders and poultry industry will be totally counter-productive.

The country’s crushing of soybean is down to 57% of last year, adding to lesser availability of soybean oil. There will be a carryover stock of more than 20 lakh tonne of uncrushed soybean at the end of the season in September 2022.

Under the circumstances, there is no justification for import of soybean meal, Pathak said, “Higher prices of soybean and soybean meal is a reality which has to be accepted, as the farmer is not willing to sell at the prices of yesteryears. For the poultry industry, to expect soybean meal at the same price as in the last few years is far removed from reality, when prices of all other commodities including oil have gone up,” he pointed out.

Import of soybean meal would help only one industry at the cost of another industry and millions of farmers would be discouraged from growing soybean, he said. “We are suffering in edible oil supply because of the policy of depending on imports and not making enough efforts to increase oilseed production. If we import soybean meal also, this will be opening up another big door for imports for future,” he said.

According to the association, the main kharif oilseeds crops of soybean and groundnut and planting will start in June. Since farmers got good prices for soybean this season, the area under cultivation is expected to further go up in 2022-23.

The association suggested that the area can be increased by 1.25 million hectares in Madhya Pradesh, Maharashtra, Karnataka, Rajasthan and Gujarat by 2024-25 in addition to 1 million hectares in rice fallows in Southern states and replacement of paddy in Haryana, Uttar Pradesh (UP), Punjab and Delhi.
Intercropping can also be done in sugarcane in autumn/spring/summer season in UP, Punjab, Haryana, Southern States.