Indian state bets big on oil palm to cut $19 billion in vegoil imports
Pullarao Daravathu and thousands of farmers from Telangana in southern India are busy planting oil palm trees as their state targets a controversial four-year increase in acreage compared to the whole country in decades. .
Telangana is targeting an additional 2 million acres of oil palm plantations over the next four years, and there is plenty of time left to achieve this goal – from building major dams and irrigation canals to importing millions of trees already. germination.
Generous government subsidies and the potential for bountiful profits compared to other crops are also encouraging farmers like Daravathu to switch to oil palm.
“The oil palm is bringing a profit of more than 200,000 Indian rupees ($2,536) per acre to farmers who planted the crop a few years ago. With rice, I’m struggling to make 40,000 rupees right now. even with a lot of effort,” said Daravathu, who grows oil palm on his five-acre farm at Sathupally, nearly 300 kilometers (186 miles) east of Hyderabad, the state capital.
The recent spike in palm oil prices has doubled the price of bunches of fresh fruit, which farmers sell to oil mills.
For years, price fluctuations, water scarcity and a nearly four-year gestation period have limited oil palm plantations in India to less than 1 million acres, mainly in coastal Andhra Pradesh, the state where Telangana is located. was discovered in 2014.
But Telangana, which occupies an inland region on the Deccan Plateau, now wants to become India’s main palm oil hub, with an acreage target that would make the state the fifth largest oil palm grower globally – from a current insignificant basis.
This dynamic could reduce India’s huge vegetable oil imports, which cost the country a record $18.9 billion a year ago and widen the nation’s trade deficit.
India meets two-thirds of its vegetable oil needs by importing about 14 million tons annually, including about 8.5 million tons of palm oil.
The federal government is keen to increase palm oil production to cut expensive imports, which has lifted inflation this year to its highest level in years after top supplier Indonesia abruptly stopped exporting.
“In the next four years, most of the palm planting will be done and after seven to eight years Telangana can produce 4 million tonnes of palm oil,” L Venkatram Reddy, the state government’s Director of Cultivation, told Reuters.
India currently produces less than 300,000 tonnes of palm oil and relies on imports from Indonesia, Malaysia and Thailand to meet its requirements.
Chava Venkateswara Rao of Godrej Agrovet Ltd, the country’s largest palm oil producer, said that even if Telangana only planted oil palm on 1 million acres and produced 2 million tons of palm oil, it would be a huge achievement.
Until last year, the country added about 35,000 acres of oil palm plantations each year.
Water first
Some areas in Telangana have enough water for thirsty oil palm trees thanks to rivers such as Godavari, Krishna and Bhima. But many bags lack water to meet the oil palm’s demand of up to 265 liters per tree per day.
To remedy that, the state built massive irrigation projects and a network of canals that now allow farmers to grow oil palm across most of the state.
“We used to face water scarcity in the summer,” said Bollampalli farmer Venkateshwar Rao, who grows oil palm on 12 acres. Now, with the Kaleshwaram irrigation project, we have plenty of water for the oil palm.
The Kaleshwaram irrigation project, nearing completion, cost the state 1.15 trillion rupees ($14.44 billion).
Reddy said authorities only allowed oil palm planting after farmers installed a water-saving micro-irrigation system.
The diversion of oil palm from wet rice and other crops could help the state reduce annual rice purchases by about 2.5 million tons and cut electricity bills for irrigation projects by 15 billion rupees because the tree Drip-irrigated oil palms need less water than Reddy says.
Ravi Mathur, head of the Indian Institute of Oil Palm Research (IIOPR), a government-backed body that leads the push for oil palm promotion, said the enhanced irrigation project has made oil palm plantations viable. feasible in areas previously unsuitable for crops because of water scarcity.
Planting materials are scarce
While thousands of farmers are looking to switch to oil palm, the stock of seedlings is limited and their preparation is a lengthy process, taking almost a year.
Companies operating in Telangana imported 12.5 million sprouts last year and produced seedlings for about 200,000 acres this year, said an official with TS Oilfed, the country’s largest sprout importer. said.
The state is aiming to import 15 million sprouts this year – mainly sourced from Indonesia, Malaysia, Thailand and Costa Rica – and 50 million next year to hit the target, he said.
But only a few companies provide sprouts.
Sougata Niyogi, a top official at Godrej Agrovet, said: “Demand spiked after the price of palm oil rose. “The supply situation will become more comfortable next year.”
(Reporting by Rajendra Jadhav; editing by Gavin Maguire and Simon Cameron-Moore)
