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Oil Division

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OilIt seeks to coordinate management of edible oils in the country through a multi-pronged strategy, namely, (i) assessment of the domestic demand for edible oils and its availability from domestic sources. Mismatch of demand and supply is met through import of edible oils so as to maintain their prices at reasonable level; (ii) It also closely monitors prices of edible oils both in the domestic and in the international market and initiate necessary policy measures whenever necessary. The Division is staffed with qualified technical people who assist the Ministry in the coordinated management of Vegetable Oils particularly relating to production/availability and monitoring of prices.

Edible Oil Scenario

Importance of Edible Oils in the Country’s Economy

OilOilseeds and edible oils are two of the most sensitive essential commodities. India is one of the largest producer of oilseeds in the world and this sector occupies an important position in the agricultural economy, accounting for production of 27.51 million tons of nine cultivated oil seeds during the year 2014-15 (November-October) as per Final Estimates released by the Ministry of Agriculture on 09.05.2016. India contributes about 6-7% of the world oilseeds production. Export of Edible oils was 38317.56 tons in the financial year 2014-15 valued at Rs 46040.37 lakhs.

Types of Oils commonly in use in India

India is fortunate in having a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut, mustard/rapeseed, sesame, safflower, linseed, niger seed/castor are the major traditionally cultivated oilseeds. Soyabean and sunflower have also assumed importance in recent years. Coconut is most important amongst the plantation crops. Efforts are being made to grow oil palm in Andhra Pradesh, Karnataka, Tamil Nadu and North- Eastern parts of the country in addition to Kerala and Andaman & Nicobar Islands. Among the non-conventional oils, rice bran oil and cottonseed oil are the most important. In addition, oilseeds of tree and forest origin, which grow mostly in tribal inhabited areas, are also a significant source of oils. Figures pertaining to estimated production of major cultivated oilseeds, availability of edible oils from all domestic sources (from Domestic and Import Sources) during the last ten years are as under: -

(In lakh Tons)

Oil Year (Nov.- Oct.) Production of Oilseeds* Net availability of edible oils from all domestic sources Imports** Total Availability of Edible Oils
2005-2006 279.79 83.16 40.91 124.07
2006-2007 242.89 73.70 46.05 119.75
2007-2008 297.55 86.54 54.34 140.88
2008-2009 277.19 84.56 74.98 159.54
2009-2010 248.83 79.46 74.64 154.1
2010-2011 324.79 97.82 72.42 170.24
2011-2012 297.98 89.57 99.43 189
2012-2013 309.43 92.19 106.05 198.24
2013-2014 328.79 100.80 109.76 210.56
2014-15 266.75 89.78 127.31 217.09
Source: *As per 4th Advance Estimates (dated 17.08.2015) released by Ministry of Agriculture.
**DGCIS

Consumption Pattern of Edible Oils in India

India is a vast country and inhabitants of several of its regions have developed specific preference for certain oils largely depending upon the oils available in the region. For example, people in the South and West prefer groundnut oil while those in the East and North use mustard/rapeseed oil. Likewise several pockets in the South have a preference for coconut and sesame oil. Inhabitants of northern plain are basically consumers of fats and therefore prefer Vanaspati, a term used to denote a partially hydrogenated edible oil mixture of oils like soyabean, sunflower, rice bran and cottonseed and oils. Many new oils from oilseeds of tree and forest origin have found their way to the edible pool largely through vanaspati route. Of late, things have changed. Through modern technological means such as physical refining, bleaching and deodorization, all oils have been rendered practically colorless, odourless and tasteless and, therefore, have become easily interchangeable in the kitchen. Oils such as soyabean cottonseed, sunflower, rice bran, palm oil and its liquid fraction- palmolein which were earlier not known have now entered the kitchen. The share of raw oil, refined oil and vanaspati in the total edible oil market is estimated roughly at 35%, 55% and 10% respectively. About 50% of domestic demand of edible oils is met through imports out of which palm oil/palmolein constitutes about 80%. The consumption of refined palmolein (RBD palmolein) as well as its blending with other oils has increased substantially over the years and is used extensively in hotels, restaurants and in preparation of wide varieties of food products.

Major Features of Edible Oil Economy.

There are two major features, which have significantly contributed to the development of this sector. One was the setting up of the Technology Mission on Oilseeds in 1986 which has been converted into a National Mission on Oilseeds and Oil Palm (NMOOP) in 2014. This gave a thrust to Government's efforts for augmenting the production of oilseeds. This is evident by the very impressive increase in the production of oilseeds from about 11.3 million tonnes in 1986-87 to 26.68 million tons in 2014-15. Most of the oilseeds are cultivated on marginal land and are dependent on rainfall and other climatic conditions. The other dominant feature which has had significant impact on the present status of edible oilseeds/oil industry has been the program of liberalization under which the Government's economic policy allowing greater freedom to the open market and encourages healthy competition and self regulation rather than protection and control. Controls and regulations have been relaxed resulting in a highly competitive market dominated by both domestic and multinational players.

Export Import Policy on Edible Oils

In order to harmonize the interests of farmers, processors and consumers and at the same time, regulate large import of edible oils to the extent possible, import duty structure on edible oils is reviewed from time to time. Current import duties on crude and refined edible oils are 12.5% and 20% respectively.

Export of edible oils had been banned w.e.f. 17.03.2008. However, w.e.f. 05.02.2013, castor oil, coconut oil from Electronic Data Interchange (EDI) ports and through notified Land Custom Stations, edible oils produced from minor forest produce and organic edible oils have been exempted from the prohibition on export of edible oils. Export of edible oils has been permitted in branded consumer packs of upto 5 kg, subject to a minimum Export Price of USD 900 per MT w.e.f. 06.02.2015. Export of Rice Bran Oil in bulk has been exempted from the ban w.e.f. 06.08.2015

Historical pattern of import duties on the major edible oils of vegetable origin

Name of Oil Rates of Import Duty / Effective Dates
Crude Palm Oil 70 % (11/08/06) 60% (24/01/07) 50% (13/04/07) 45% (23/07/07) 20% (21/03/08) 0% (01/04/08) 0% (17/03/12) 2.5% (23/01/13) 2.5% (23/01/13) 7.5% (24/12/2014) 12.5% (17/09/2015)
RBD Palmolein 80 % (11/08/06) 67.5% (24/01/07) 57.5% (13/04/07) 52.5% (23/07/07) 27.5% (21/03/08) 7.5 (01/04/08) 7.5 % (17/03/12) 7.5 % (17/03/12) 10% (20/01/2014) 15% (24/12/2014 20% (17/09/2015)
Crude Soyabean Oil 40% (23/07/07) 0% (01/04/08) 20% (18/11/08) 0% (24/03/09) 0.00% 0.00% 0% (17/03/12) 2.5% (23/01/13) 2.5% (23/01/13) 7.5% (24/12/2014 12.5% (17/09/2015)
Refined Soyabean Oil 40% (23/07/07) 7.5 % (01/04/08) 7.5 % (18/11/08) 7.5 % (24/03/09) 7.50% 7.50% 7.5 % (17/03/12) 7.5 % (17/03/12) 10% (20/01/2014) 15% (24/12/2014 20% (17/09/2015)
Crude Sunflower Oil 65% (24/01/07) 50% (01/03/07) 40% (23/07/07) 20% (21/03/08) 0% (01/04/08) 0% (24/03/09) 0% (17/03/12) 2.5% (23/01/13) 2.5% (23/01/13) 7.5% (24/12/2014 12.5% (17/09/2015)
Refined Sunflower Oil 75% (24/01/07) 60% (01/03/07) 50% (23/07/07) 27.5% (21/03/08) 7.5 % (01/04/08) 7.5 % (24/03/09) 7.5 % (17/03/12) 7.5 % (17/03/12) 10% (20/01/2014) 15% (24/12/2014 20% (17/09/2015)

Major recent decisions in respect of edible oils during 2014-15

  • 1. Vide Notification No. 108 (RE-2013)/2009-2014 dated 6th February, Export of edible oils in branded consumer packs is permitted with a Minimum Export Price of USD 900 per MT.
  • 2. Vide Notification No. 17/2015-20 dated 6th August, 2015, Organic edible oils subject to export contracts being registered and certified as ‘Organic’ by Agricultural & Processed Food Products Export Development Authority (APEDA) and Rice Bran Oil in bulk have been exempted from the ban on export of edible oils.
  • 3. Vide Notification No. 46/2015-Customs dated 17th September, 2015, the import duty on crude oils increased from 7.5% to 12.5% and import duty on refined edible oils has been increased from 15.0% to 20.0%.
  • 4. With the implementation of FSSAI Act, 2006 w.e.f. 5th August, 2011, the edible oils industries is now governed by FSSAI for issue of license, safety and standard parameters. However, the date monitoring of procurement for the edible oil industries are being administered by DVVOF under Vegetable Oils Products, Production and Availability (Regulation) Order, 2011

E-GOVERNANCE INITIATIVES

In order to improve and systemize the data management system in the vegetable oil sector, the Directorate of Sugar & Vegetable Oils under Department of Food and Public Distribution has developed a web based platform (evegoils.nic.in) for online submission of inputs by vegetable oil producers on monthly basis. This has helped the Government to take prompt and informed policy decisions for better management of vegetable oil sector. The new system also provides transparency in the data management of the vegetable oil industry as well as Government’s working. The portal also provides window for online registration and submission of monthly production returns.

Status of the Vegetable Oil Industry (as on 26.05.2016 )

Vegetable Oil Industries registered under VOPPA(R) Order, 2011, with the Directorate

Type of Industry No. Of Units Registered
Vanaspati, Interestified Vegetable Fats 91
Refinery along with Solvent plant & Oil Mills. 191
Oil Mill & Blended Edible Vegetable Oil. 116
Solvent Extraction Units 110
Total 508

Annual Capacity of Different Vegetable Oil Manufacturing Plants

Name of Plant Annual Capacity(Lakh MT)
Oil Mill expeller 54.9
Solvent Extraction plant 5037.5
Refinery. 1544.2
Hydrogenation Plant 50.0
Inter-Esterification Plant 14.9
Margarine/Spreads Plant 6.1
Blended Edible Vegetable Oil Plant 47.2
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