3/28/05China and India ARE large consumers of edible oils and their importprogrammes impact world trade in the commodity. India is the world's thirdlargest consumer after China and EU and the market is worth over Rs 50,000crore. It is a lot more in China.

Yusof Basiron, director general of Malaysian Palm Oil Board, says thatdespite the agenda of self-reliance, China and India will remainsignificantly dependent on imports to bridge gaps between demand andsupply. High rates of growth in India and China should result in anincreasingly higher per capita consumption of oils. Expansion of oilseedsproduction in China and India look inevitable and it will require dynamicpolicy reengineering and monetary incentives like high support prices toget extra land under oilseeds.

Sharad Pawar, agriculture minister, feels if India's per capita oilconsumption is to be scaled up to the world average of 22.5 kg., itsrequirement will double to 24m tonnes. Pawar has announced that India willencourage import of high oil content oilseeds and also GM oilseeds withoutcompromising farmers' interests. India remains the world's largestimporter of oils but mostly in crude form. Imports of seeds instead ofoils means the huge seeds crushing capacity now lying unused can beutilised. In the current season, the domestic oilseeds crop will be lessthan 25.14m tonnes acheived in 2003-04, but crushing capacity is nearly30m tonnes.

Dorab E Mistry, director of Godrej International, feels about 500,000tonnes of oilseeds could be imported in the first year and to replaceabout 200,000 tonnes of vegoil imports, with both palm and soya losingabout 100,000 tonnes each., with copra and palm kernel being the mostlogical import choices. India's oils consumption is likely to rise from10.82m tonnes in 2003-04 to 11.35m tonnes this year and to 11.80m tonnesnext year. Higher oilseeds imports will not impact on the global oilsmarket. An encouraging development is that China is very positive about GMoilseeds. Per capita oil use is growing at a faster pace in China and was9.5 per cent last year.

According to John Goodwin, president of International Association of SeedCrushers, dramatic increases in soya and palm production were primarilyresponsible for the more than 250 per cent growth in the world oilseedsproduction from 140m tonnes in the mid 1980s to 360m tonnes in 2004-2005.During this period, world oils and fats production doubled to 130m tonnesfrom 65m tonnes. He says lifting oilseeds production in the coming decadesas the world population rises from the present 6bn to 9bn by 2050 is achallenge. The US census department has forecast that world populationgrowth by 2050 would alone trigger a 50 per cent increase in oils and fatsdemand. This ignores impact of rising per capita consumption in developingcountries and most significantly, in China and India, according toGoodwin. The principal challenge faced by all oilseeds producing countriesis to raise agricultural productivity as land availability is limited.Most agronomists feel breakthrough in productivity will come from more andmore land being sown with genetically modified (GM) oilseeds. At present,more than 50 per cent of world soya bean production is through the GMroute. GM seeds can improve productivity and also enable farmers to useless herbicides and pesticides. Moreover, farm safety levels in plots ofland growing GM crops are comparatively high.But concerns about GMoilseeds and trans fats remain in many markets and consumer groups. Whilegenuine concerns should be addressed, the issue of application ofbiotechnology in oilseeds cannot be allowed to be hijacked by NGOs andpressure groups. Goodwin said the rise in use of GM oilseeds would belinked to governmental commitment to research and alliances betweenproducers and consumers to dispel misgivings.