Unlocking the Complexities of India's Edible Oil Supply and Demand: An Exclusive Conversation with Nirav Desai

Navigating the Volatile Landscape: Key Variables Impacting India's Edible Oil Market

What are the main variables impacting the current market dynamics and how do you envision these variables influencing the industry in the near future, given your considerable experience in studying the supply and demand situation of edible oils in India ?

Factors affecting market 

1. Prices: India is a price sensitive market, Consumption increases at lower prices whereas demand rationed at higher prices.
2. Domestic output of oilseeds and oils.
3. Seasonal supplies in domestic markets. 
4. Festivals, Marriage season when consumption is higher.
5. Govt policies like import duties, Restricting or allowing free imports, MSP, Stock limit, Procurement through NAFED etc.
6. Parity and disparity in importing edible oils.
7. Stock position at port and pipeline. 
8. Economic growth of country. 

According supply and demand situation of edible oils in India, currently due to ongoing record imports stocks of edible oils are burgeoning and with nearing new khariff oilseed crop the supply side is plentiful in near terms. On the other hand due to festival season there will be higher demand for edible oils which seems to be covered up. So prices may not show any big hiccups.    

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Global Trade and Policy: How International Decisions Affect India's Edible Oil Business

Could you provide your thoughts on the probable effects of international trade policy on the edible oil business and agri trade in India as an expert on Indian Agri futures. How can stakeholders overcome these obstacles successfully? 

Government policies that influence the prices and affect the market in a big way which we saw in recent years:

-Indonesia bans palm oil exports disrupted global supply chains and lead to shortages.
-The Indian government's decision to maintain low import duties on edible oils to contain inflation.
-Geopolitical conflicts, like the Ukraine-Russia war, can disrupt global trade routes and cause delays in the transportation of goods.
-Economic factors in major importing countries like China can affect the demand for edible oils.

 To maintain price stability and ensure availability, it's crucial for governments and trade bodies to engage in effective communication, coordination, and regional collaboration. This can help mitigate the impact of disruptions and ensure a more secure supply of edible oils.

Tech and Sustainability: The Future of Oilseed Production Costs for Indian Farmers

Your research work on the cost of production of Indian farmers is crucial in understanding the economic aspects of the agri sector. How do you see advancements in technology and sustainable practices influencing the cost dynamics for farmers in the production of oilseeds and what opportunities does it present for the edible oil industry?  

Though cost of production is important but agriculture sector in India is influenced by a complex interplay of factors like.

- Weather, including timely or late rains, plays a significant role in crop planning.
- The prices of agricultural commodities strongly influence farmers' decisions on which crops to sown.
- The potential return on crop. This includes the cost of production, market prices, and expected yields.
- Crop selection also depends on the suitability of the local climate and soil fertility.

The adoption of advanced agricultural practices and technologies can reduce the cost of production and increase crop yields. This can lead to higher profitability for farmers.

Increased productivity can lead to a more regular supply. This can enhance the competitiveness of Indian agricultural products in international markets. However, India's yields may still be lower compared to countries using genetically modified crops (GM).

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