India's Edible Oil Crisis: Farmers Opt for Maize over Oilseeds due to Unfavorable Prices

Strategic Insights -

India, the largest importer of edible oils, is bracing for a potential crisis as farmers are choosing to grow maize instead of oilseeds like soyabean and groundnuts due to depressed prices. The country imports close to 60% of its domestic requirement, with pulses imports reaching an all-time high of 6.63 million tonnes in 2024, double the previous year. The government's promise to procure 100% of pulses produce may encourage farmers to opt for tur, but the likelihood of farmers replacing soyabean and tur with maize remains high.

Key Takeaways:

  • Farmers are choosing to grow maize instead of oilseeds like soyabean and groundnuts due to depressed prices, which may lead to India becoming even more import-dependent for cooking oil.
  • The country imports close to 60% of its domestic requirement, with pulses imports reaching an all-time high of 6.63 million tonnes in 2024, double the previous year.
  • The government fixed a minimum support price (MSP) of ₹4,892 per quintal for soyabean, but prices have been 10% to 20% below this level since the start of the new marketing year in October 2024.
  • The realisations from soyabean meal are low due to the suppressed prices of DDGS (distillers dried grain soluble), a byproduct of crushed maize.
  • The area under soyabean is 2% less, and that under tur is down 5% as on June 20 compared to last year.
  • Agriculture minister Shivraj Singh Chouhan has engaged with farmers in key producing states to help them increase productivity, which has been stagnant for some time.
  • Chouhan has promised to help farmers through research on increasing per hectare productivity, genome editing for improved seed varieties, new techniques to prevent root rot, and mechanisation due to labour shortages.
  • The petroleum ministry has proposed to limit sowing of maize in sugarcane growing areas without compromising on the acreage of other crops such as soybean and pulses.
  • The government's ethanol-blended petrol programme has led to a surge in all India average prices of maize from ₹14,000-15,000 to ₹24,000-25,000 per tonne in the last four years.

Statistics:

  • India imports close to 60% of its domestic edible oil requirement.
  • Pulses imports reached an all-time high of 6.63 million tonnes in 2024, double the previous year.
  • Soyabean prices have been 10% to 20% below the minimum support price (MSP) of ₹4,892 per quintal since the start of the new marketing year in October 2024.
  • The area under soyabean is 2% less, and that under tur is down 5% as on June 20 compared to last year.
  • All India average prices of maize surged from ₹14,000-15,000 to ₹24,000-25,000 per tonne in the last four years due to the government's ethanol-blended petrol programme.

Sources:

  • Times of India - "Depressed soyabean prices, low realisation from soyabean meal may lead to farmers opting for maize in India"
  • Asian Palm Oil Alliance - Atul Chaturvedi, Executive Chairman
  • Times of India - "Agriculture Minister Shivraj Singh Chouhan engages with farmers in MP, Rajasthan, Maharashtra to boost productivity"
  • Times of India - "India's edible oil imports to remain high in 2024 despite cheap prices"