Production of crops like soybean and groundnut is likely to be affected due to drought in the country. Edible oil imports could reach 17.5 million tonnes, while the poultry industry has sought permission to import soybean meal and maize. The impact of drought on agricultural production is visible in India this financial year. There is growing concern over the supply of food items and animal feed in the domestic market. In such a situation, the country may have to increase its imports of edible oil, soybean meal, maize, sugar and other agricultural products.
According to an ET report, availability of edible oil may increase due to impact on soybean and groundnut crops in Kharif season. On the other hand, the poultry industry is worried about the rising cost of animal feed and is demanding the government to allow imports of soybean meal and maize. Its impact will not be limited to the agricultural sector. Prices of edible oil, chicken, eggs and other food products may also come under pressure. However, how much the prices will rise will depend on domestic production, international market, import policy and government decisions.
Imports may increase
According to people involved in the matter, India’s imports of food items, animal feed and agricultural raw materials are likely to increase in the current financial year. Drought has reduced crop production, raising supply concerns. At the same time, the industry wants to ease imports to control its costs. Soybean and groundnut production is likely to decline in the kharif season, which may increase import of edible oil. Apart from this, there is also concern about the winter mustard crop. The sugar industry has already got permission to extend the deadline for importing raw sugar. The poultry industry is seeking permission to import soybean meal and maize, while textile manufacturers are seeking removal of import duty on cotton. The starch industry fears that if more corn goes into ethanol production, they may have to import more starch from China.
El Nino had an effect
The impact of ‘El Nino’ on agriculture may increase the share of imported food staples in Indian kitchens. The strongest ‘El Nino’ on record has severely affected the production of essential crops like pulses, sugar, oilseeds and paddy. India’s soybean imports from least developed countries in Africa have hit record levels after heavy rains hit the crop last year. Soybean shortage is likely to continue in this financial year as well. Crops have withered due to drought in parts of Marathwada, Vidarbha, Telangana and Madhya Pradesh.
Farmers may suffer
Divya Kumar Gulati, former president of ‘Compound Livestock Feed Manufacturers Association’, said in an ET report that we have sought permission from the government to import 30 lakh tonnes of soybean meal. Soybeans and corn account for 80% of poultry feed, and their prices are already high even though it’s harvest time. He further said that if we do not allow imports, the prices of poultry products may go up drastically and farmers may suffer.
According to a recent estimate by the Solvent Extractors Association, the production of kharif groundnut this year may decline by more than 20%. “We expect total edible oil imports to increase from 16.5 million tonnes in 2025-26 to 17.5 million tonnes in 2026-27,” Sandeep Bajoria, CEO of commodity brokerage house ‘Sunwin Group’, said in an ET report. This is because we are facing the impact of drought on oilseed production locally. We will have to wait for the production of the mustard crop to know the exact figures.
