Edible oil prices have steeply risen since May and are showing no signs of coming down. The main edible oils used throughout India are palm oil and soybean oil. Palm oil is imported from Malaysia and Indonesia, while soybean oil comes mainly from Brazil, Argentina and the US. India relies on more than 60% on the imports of edible oils, and any price hike in the global market is bound to hike its price in the Indian market.
Contrary to our belief, India is far from being self-reliant in edible oil. India is a massive consumer of refined oil, and domestic production is insufficient to meet such high demands. Being a populated country, she has less scope for enormous oil palm plantations than Indonesia and Malaysia. The output in these two global exporters of palm oil has decreased of late. The covid-19 pandemic has resulted in significant emigration of foreign workers to their respective countries, lowering the available labour and thus reducing production.
A similar story goes to a lesser extent for Brazil and the US regarding soybean oil production, with one added point that dry weather in Argentina reduced soybean production. Ukraine and Russia account for most of the sunflower oil imports, which too have gone down due to drought-like conditions. Moreover, the rise of biofuels across the globe demand use of edible oil for energy production instead of consumption. All these together account for the steep increase in prices of all refined oils – palm oil, soybean oil, rice bran oil, and sunflower oil. Prices have increased from a mere 110 rupees to 160-180 rupees a litre.
But it is not in every field of edible oil production that India is lacking. In mustard oil, India holds one of the top spots and can also export that to other countries should a need arise. However, like other edible oils, the price of mustard oil has gone up way more than it ever has been. Mustard oil hovered around 130-140 rupees a litre just two months back. It has now increased to 180-200. The production of mustard oil hasn’t decreased. However, it seems to follow the global trend of oil price hike.
India has a long history of oil consumption, with many historians pointing out that the earliest production of oil began in India during the Indus Valley Civilization. Sesame seeds were pressed to extract oil from them using a presser, locally called ghani. In the modern world, sesame oil seems to have been overshadowed by the heavy use of refined oils. It is only in Rajasthan, where it was used historically. In South Indian states of Andhra Pradesh, Tamil Nadu, Karnataka, and Telangana use substantial amounts of sesame oil in local cuisine. Sesame oil is quite expensive in India due to cold-pressed extraction techniques, also called kachhi-ghani, but is much more healthy than refined oils. Thus, a hike in refined oil prices may benefit sesame oil production and consumption in the long run.
Cold-pressed oils such as groundnut oil and coconut oil have been used in many dishes of western India and Kerala, respectively, mainly for their retention of flavour, odour, and texture (colour). Groundnut oil, in particular, along with cottonseed oil, has faced a surge in price due to low productivity and crop damage this year. Among the introduced crops, cold-pressed sunflower oil and cold-pressed safflower oil shows promising future, as they are both neutral in taste but much more healthy. Olive plantation has picked up pace in Rajasthan, and the olive oil price has considerably decreased in recent times.
A hike in edible oil prices is very challenging for middle and lower-class families, constituting the bulk of the population in India. This comes at a time when the country is reeling under severe Covid-19 crisis, where a chunk of the population are facing economic stress, and many have lost their job. So in the short term, it is no doubt that the hike in edible oil prices is a disaster for most Indians. However, in the long term, the promotion of indigenous and traditional oil extraction methods by cold-pressed methods from indigenous oilseeds may make a chunk of the population switch to healthier alternatives without compromising much on the cost.
Written by – Himadri Paul