India is the largest importer of edible oil in the world. This also means that the Indian economy, and the budget of its households, is extremely sensitive to any movement in the global edible oil market. At the same time, India is not self-sufficient in the matter of pulses. For this it is imported from many countries. The prices of edible oils have risen significantly in the wake of the recent global turmoil. According to the latest Consumption Expenditure Survey, Indian consumers spend more on pulses than on edible oil. But the recent global movement may add to the woes of Indian consumers. Indonesia’s decision to ban the export of palm oil on April 22 is likely to shock Indian consumers.
Indonesia is the world’s largest producer of palm oil. However, he has completely denied the ban. India’s decision to export wheat may also add to the challenges amid rising oil and pulses consumption and prices. The consumption of cereals is the highest after pulses and oil in terms of quantity. India is expecting to export 15 to 15 million tonnes of wheat this year to meet the shortfall created by the Russian invasion of Ukraine. The agricultural prowess that India is displaying in wheat is in stark contrast to the country’s record.
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Increase in consumption of cereals and pulses
According to the data, the share of food grains in the total consumption in the bottom 10 percent of poor households is 21.4 percent. Whereas in the case of the top 10 per cent of the rich, the consumption of food grains is 3.4 per cent. Similarly, consumption of pulses and allied products in the lower 10 percent of poor households is 4.9 percent. Whereas in the case of the rich it is 1.1 percent. Similarly, in the case of edible oil, consumption in the bottom 10 per cent of poor households is 5.8 per cent. Whereas in the case of the rich, it is 1.3 percent. The same is true in the case of vegetables as well.
More spending on import of edible oil after crude
Crude oil, the basic product of petrol and diesel, spends the most foreign exchange. After this, the highest expenditure is incurred on the import of edible oil. According to industry data, edible oil is imported into the country every year to the tune of Rs 1.5 lakh to Rs 2 lakh crore. In this, the maximum 43 percent import is of crude palm oil. This is followed by palm oil and its related products (pomoline) contributing 21 per cent. After that, the import of soybean oil is 20 percent and the contribution of sunflower oil is 16 percent.
worst hit on the poor
According to the data of the latest Consumption Expenditure Survey, the inflation of edible oils is falling the most on the poor. The consumption of edible oils has increased in the total expenditure of the poorest 10 per cent of the population at the bottom, according to estimates based on 2011-12 data. In such a situation, due to its costly, the budget of those families has increased the most. The share of edible oils in the total household budget of the rich has declined during this period.