Channel: Down To Earth

Category: Science & Technology

Tags: indian agriculture ministryhealth mobilitysunflower seedshigh pricecivil service preparationssoya oilmsppandemicias coachingprice risesunflower oilrussia ukraine warupscpalm oil crisisindonesia export banindonesiasustainable developmentenvironmentindian consumer marketprice surgecsedown to earthsciencepalm export bancovid 19centre for science and environmentedible oilrussian invasioncooking oil

Description: In May 2022, the average price of sunflower oil surged to Rs 180 and 250 per litre. This is a massive leap considering the price was on an average of Rs 98 per litre across brands in February 2019. Edible oil prices in India have also surged 70 per cent year on year and about 20-30 per cent month-on-month. So, Why is there a sudden rise in prices? It is not just in India but cooking oil prices have been globally rising since the COVID-19 pandemic. Many reasons for this surge include poor harvests in South America to pandemic-related labour shortages along with a steady increase in demand from the biofuel industry. But the real crisis began when Russian troops invaded Ukraine in February 2022. Russia and Ukraine together account for 60 per cent of sunflower oil production and exports in the world. India consumes about 25 million tonnes of edible oil each year, of which it imports about 60 per cent, making it the largest importer of edible oils in the world. The ongoing Ukraine-Russia conflict has disrupted India’s edible oil market which gets more than 90 per cent of its sunflower oil from those two countries. Sunflower oil is an important part of the Indian consumer market and accounts for 16 per cent of total cooking oils being imported. While in the past few years, the Indian government has been trying to increase the production of domestic edible oil, sunflower cultivation has actually declined. In the last 30 years, India’s cultivation of sunflowers has declined by 90%. India produced 13.48 lakh tonnes of sunflower in 1993-94. This came down to 2.28 lakh tonnes in 2020-21. The lack of availability of good quality seeds and increased irrigation arrangements in rain-fed areas were the two main reasons why sunflower cultivation had come down drastically. Around 70 per cent of the sunflower oil that India imported came from Ukraine, while 20 per cent came from Russia. Latest reports suggest that India has contracted 45,000 tonnes of Russian sunflower oil at a record high price. What has made the situation worse for the Indian consumer is the lower availability of other edible oils internationally. Vegetable oil supplies have decreased because of Indonesia's decision to restrict palm oil exports. Indian Agriculture Ministry officials at meetings held in April 2022 decided to work towards increasing the acreage of sunflowers, increasing the Minimum Support Price (MSP) and making good quality seeds available to farmers. But in the meantime, Indian consumers will have to pay a huge price as the war continues and the supply chains of other edible oils remain disrupted.