Godrej Industries (Godrej), India’s richest family-owned conglomerate for 125 years, is looking to increase the number of oil palm plantations in response to the Modi government’s plan to boost the country’s palm oil production and cut edible oil imports.
Godrej Agrovet, the agricultural and chemicals arm of the Godrej Group, is India’s largest oil palm processor and is backed by Singapore’s sovereign wealth fund Temasek Holdings. Nadir Godrej, chairman of the company’s board of directors, said at its headquarters in Mumbai that the company will more than double the area of oil palm trees under its management over the next six years. Godrej camp’s businesses span consumer goods, financial services and real estate. Godrej is strengthening its position in the palm oil industry following the Modi government’s announcement last year that it would spend 110.4 billion rupees ($1.4 billion) to boost the country’s palm oil production.
India is the world’s largest importer of vegetable oil and relies on imports for 60 percent of its domestic edible oil needs. India plans to nearly triple its palm plantation area to 1 million hectares (2.5 million acres) by 2026, although this target is small compared to Indonesia, which has 16 million hectares, and Malaysia, which has about 6 million hectares.
The Indian government is eager to reduce its spending on edible oil imports. In the 2021/22 year ending in October, India’s edible oil imports rose nearly 7% year-on-year to 14 million tons, with palm oil accounting for more than half of total imports.
Godrej said the government invested a lot of money to support farmers in the early stages. The company believes a significant increase in sown area is possible, although it remains relatively small. The company has 40,000 hectares of palm plantations in India and aims to add 5,000 hectares next year and then 10,000 hectares a year for the next five years. India has been trying to increase its domestic edible oil supply to hedge against the risk of frequent spikes in international edible oil prices.
Earlier this year, Indonesia banned palm oil exports, pushing palm oil prices to a record high of RM7,238; at the time, sunflower oil supplies from the Black Sea were also disrupted by the Russia-Ukraine conflict. Indians usually prefer palm oil to soft oil because it is cheaper and easy to mix with other fats.
Source: BoE Guru
Post time: Dec-09-2022