New Delhi, Sept 18 (KNN) At a time when the government has hiked the import duty on edible oil by 5 per cent, a study says that significant deficient rainfall will surge India’s edible oil import bill to USD 14 billion in the current financial year.

According a paper by ASSOCHAM, the deficit in rainfall so far for the year (2015-16) as per the latest available information is 12 per cent, therefore assuming that the production of oil seeds for 2015-16 remains at the level of 2014-15 and anticipating a rise in demand, vegetable oils imports would reach around USD 14 billion for 2015-16 which was actually around USD 10 billion last year. These imports were USD 7.2 billion in 2013-14, increasing by over 46 per cent in the subsequent year.

India imported edible oils worth USD 10 billion in 2014-15, the highest until then as the rains were deficient in the growing states last year as well. However, a new record of edible oils import is going to be made this year as production of oilseeds in Gujarat, Madhya Pradesh, Maharashtra, Andhra Pradesh and Tamil Nadu is expected to drop, it said.

The study said growth in the domestic production of oilseeds has not been able to keep pace with the increasing demand in the country. Low and unstable yields of most oilseed crops, and uncertainty in returns to investment, which result from the continuing cultivation of oilseeds in rain-fed, high risk production environments, are the factors leading to this situation of wide demand-supply gap.

Farmers mostly cultivate oil seeds on un-irrigated land and needless to say that monsoons play decisive role in the production of oil seeds in these states. Further, uncertainty associated with rain-fed crops, high risk production environments and shifting of land from oilseed cultivation to alternative uses contribute to India’s current state of oil seeds sector, it said. (KNN Bureau)