Which of the statements given is/are correct? The quantity of imported edible oils is more than the domestic production of edible oils in the last five years? The Government does not impose any customs duty on all imported edible oils as a special case? [2018]

Consider the following statements:

The quantity of imported edible oils is more than the domestic production of edible oils in the last five years.
The Government does not impose any customs duty on all imported edible oils as a special case.

Which of the statements given above is/are correct?

1 only
2 only
Both 1 and 2
Neither 1 nor 2

Explanation

Statement 1 is correct

The quantity of imported edible oils is more than the domestic production of edible oils in the last five years (2013-2017). According to the credit rating agency ICRA report in 2017, India occupies a prominent position in the world oilseeds industry with a contribution of around 10 % in worldwide production. But the demand of edible oils (extracted from oilseeds in addition to palm oil) is significantly higher than the domestic production, leading to dependence on imports (around 60% of requirement). From a 10-year perspective, India’s edible oil imports have increased from 11.6 mt (valued at Rs 60,750 crore) in 2013-14 to 16.5 mt (Rs 138,424 crore) in 2022-23, with the jump pronounced in the last three years.

Two tables and one line chart present data on India's edible oil imports, production, and vegetable oils inflation from 2013-14 to 2022-23. Tables show import quantities and values, and production volumes of various oils, while the chart compares domestic and global vegetable oil inflation trends, highlighting a peak domestic inflation of 124.87% and a recent decline to -20.67%.

Statement 2 is incorrect

Customs duties are imposed on many types of imported edible oils. There have been instances of temporary duty reductions, but not all imported edible oils are free of customs duties.

Additional Information: Edible Oil Production and Consumption in India – Statistics

Oilseeds account for 14.3% of the gross cropped area in India. Together, soybean (36%), groundnut (32%), and rapeseed mustard (29%) account for 97% of the total edible oilseeds production. Approx. 70% of the oilseeds are cultivated in rainfed ecosystems. During the past five decades, the average yield of annual oilseeds has almost tripled. Oilseeds account for about 8% of the agricultural exports.
India is the 4th largest vegetable oil economy next to the USA, China and Brazil. It ranks 1st in the production of castor, safflower, sesame, and niger, 2nd in groundnut, and 3rd in rapeseed-mustard.
Total domestic production of edible oils is far below the annual requirement of over 25 million tonnes. In 2022-23, India’s edible oil production from domestic sources amounted to around 10.3 mt (only 38.6%). India is the largest importer of vegetable oils (15% share), followed by China and the USA. It imports 55-60% of its edible oil requirements. Of imported edible oils, the share of palm oil is 60%, followed by soybean oil (25%) and sunflower (12%).
Sunflower oil is imported from Russia (1.5 mt), Romania (0.6 mt), Ukraine (0.5 mt) & Argentina (0.4 mt).
Soyabean oil is imported primarily from Argentina & Brazil, while palm oil from Indonesia and Malaysia.
Sunflower oil is predominantly consumed in Southern states (70%) followed by Maharashtra (10-15%).
Soyabean oil is predominantly consumed in the North and East (along with locally-produced mustard), and also in the West (with sunflower and indigenous groundnut and cottonseed oil).

Answer: (a) 1 only; Difficulty Level: Hard

2018, PYQs