KUALA LUMPUR (July 15): While retail consumption in India is on the rise and is expected to inch up further in the coming festive season, it is the hotel, restaurant and café (HoReCa) sector that holds the key for palm oil demand, according to a Malaysian Palm Oil Council (MPOC) official.
Country representative for India/Sri Lanka, Bhavna Shah, said crude palm oil imports last month registered a 51 percent increase but soft oils showed a jump of 87 percent.
“This signifies a lack of demand from the HoReCa segment, with the focus still being on home consumption. (However,) the HoReca sector is slowly being revived with the relaxation of the COVID-19 lockdown rules,” she wrote in an article entitled “Palm Oil, Looking Beyond the Pandemic” on the MPOC website.
Bhavna noted that the stocks of vegetable oils in India were at historic lows.
“In view of the pandemic, off-take continues to be subdued, though signs of recovery are obvious with the relaxing of the restrictions. June-end stocks are 25 percent lower than the same period last year but four per cent higher than the previous month,” she said.
The manufacturing pipeline, which was dry, had absorbed the entire imports of June 2020, Bhavna said.
“Imports in the next two months will have to be robust to ensure the pipeline is replenished to a reasonable extent but thereafter a slowdown is expected again,” she said.
According to her, the industry is limping back and it is hoped that the gradual opening up of the economy and the upcoming festive season will bring in good tidings for the industry as a whole and palm oil in particular.
However, she cautioned that India was planning to become a self-sufficient country.
Oil palm has been identified as the only crop that can yield four metric tonnes of oil from every hectare, under ideal conditions.
“India has identified about two million hectares suitable for oil palm cultivation. This can, in due course, yield up to eight million tonnes of palm oil.
“For this to materialise, the country needs to have a long-term vision and strategy. If the government wants ‘aatma nirbhar bharat’ (self-reliant India) in oilseeds, oil palm is the crop that will help it go a long way,” she said.
However, due to its large population, more than 65 percent of India’s domestic needs are catered to by imports and to balance the gap between demand and supply, the country would need to ramp up domestic production significantly.
“Whilst acreage under cultivation is on the increase, the crying need of the hour is to increase agri yields.
“Mustard, sunflower, groundnut and cottonseed possess the potential to increase oil output but only marginally. The maximum potential lies in oil palm,” she added.
India is a major importer of vegetable oils for edible usage, making cosmetics, oleochemicals and medicines.
Source : The Edge Markets