The India oilseeds and products annual report for 2017 was recently released. This report brings together production, consumption and trade figures on various oilseed crops (soybean, rapeseed, mustard, peanuts, sunflower, cottonseed, and copra), oil-meal (a meal made from the residue of pressed oilseeds, most commonly used as animal feed or fertilizer) and edible oils. In addition, the report discusses various policy developments relevant to these various oilseed crops. In India, on average around 70-80 percent of oilseed stocks are crushed for meal and oil.
The main message of the report is that, after two years of declining production, total oilseed production in 2017/2018 is expected to increase by 7 percent to 38.6 million tons, covering 40 million hectares. This forecast is based on India experiencing a normal 2017 Southwest monsoon, average yields and adequate market price incentives that encourage farmers to grow oilseeds. These assumptions are significant as over the past two years two million hectares of traditional oilseed areas were diverted or left fallow due to dry weather or competing crops. Regarding trade, oilseed exports (high value hand-picked seeds) are expected to rise by 2 percent to 1.2 million tons totalling $1.4 billion. The report does not highlight any significant policy developments regarding the oilseed sector in 2016 but highlights that policy is generally supportive of supporting domestic production as oilseed imports generally face high tariffs (around 30 percent for most crops).
Similarly, edible oil production is expected to rise by 6.4 percent to 7.6 million tons. Despite this increase, production is expected to fall far short of consumption, which is also expected to increase by 6 percent to 24.4 million tons driven by India’s growing population, rising disposable incomes, and strong demand from household and institutional buyers. It is also important to note that per capita edible oil consumption, at 18 kilograms per capita, falls short of global per capita average consumption, at 24 kilograms per capita, suggesting that as Indian incomes rise and diets change in the short and medium term the demand for edible oils is likely to increase significantly. The shortfall between consumption and production is made up by imports, expected at 16.8 million tons in 2017, making India the world’s largest edible oil importer. Various Indian policies are designed to stimulate domestic edible oil production, for instance, India bans the export of most edible oils and places import duties on imported oils. Over the past year, the Indian Government lowered the import duty of crude palm oil from 12.5 percent to 7.5 percent and refined palm oil from 20 percent to 15 percent.
Oil-meal production in India is expected to increase by 10 percent to 17 million tons driven by increased oilseed supplies and demand from the poultry, livestock and aquaculture sectors. The use of oil-meal remains diverse in India, in addition to animal feed use, oil meals like soymeal are increasingly used in processed food products, healthcare products, and also as low-cost high-protein supplements. Soymeal is also widely used as protein to fortify other food products (wheat flours and biscuits). Overall, oil-meal consumption is expected to increase by 12 percent to 14.8 million tons as the growing demand for animal products is driving increased oil-meal consumption. Similarly, Indian oil-meal exports are expected to recover to 2.7 million tons from 1.4 million tons last year. The report does not highlight any significant policy developments in the oil-meal sector for 2016.