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AN ANALYSIS OF INDIA’S TRADE AND PRICE VOLATILITY IN OILSEEDS AND EDIBLE OILS

KrishiKosh

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Title AN ANALYSIS OF INDIA’S TRADE AND PRICE VOLATILITY IN OILSEEDS AND EDIBLE OILS
 
Creator AJESH P
 
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Description T-8528
India‟s diverse agro-climatic regions allow it to cultivate a number of oilseed
crops among which groundnut, rapeseed and mustard, and soybean are the major
crops. In spite of being one of the largest producers of oilseeds, India is unable to
meet its domestic edible oil requirements compelling it to import edible oils.
Currently India is a major importer of edible oils, meeting over 40 per cent of its
domestic demand through imports. The huge import volumes subject the country‟s
oilseeds economy to the influences of global prices and production trends increasing
the vulnerability of domestic consumers and producers to fluctuations in world prices
and production. The major aim of the present study is to analyse the spatial and
temporal performance of India‟s oilseeds economy, examine the dynamics of edible
oils imports and analyse the volatility in prices of edible oils. Decadal analysis of the
performance of oilseeds sector showed that the last three decades since 1980
witnessed high growth rate in total oilseed production and productivity, while area
registered a high compound rate of annual growth during 1980-90 and 2000-10. In
terms of individual oilseeds crops, groundnut, mustard, and soybean all showed high
rates of growth during 1980-90 in area, production and productivity, indicating the
positive impact of the Technology Mission on Oilseeds (TMO). Considerable interyear
variability is evident in the performance of various oilseed crops in the last two
decades. Only soybean has shown substantially high rates of growth in area,
production and productivity during the period. Spatially, the share of Madhya
Pradesh, Rajasthan and Maharashtra in total oilseeds production and area has
increased between 1987 and 2008, while that of the other major states have either
declined or remained stagnant. Gujarat has performed well in groundnut and
Rajasthan in mustard production. Imports of edible oils have increased substantially
after the establishment of the WTO. Palm oil and soybean oil constitute a major part
of edible oil imports. High Hirschman Index values in most years indicated that
India‟s imports of edible oils are confined to a few countries. In recent years,
Argentina, Brazil, and USA have together accounted for around 90 per cent of India‟s
soybean oil imports. Over 95 per cent of palm oil imports are being made from
Indonesia and Malaysia. Since imports of mustard oil are meagre, in some years the
Hirschman Index was found to be 100 indicating that the entire supply came from a
single country. Price volatility was analysed using GARCH model across major
markets for different oilseeds and edible oils. The volatility and the tendency for
volatility to persist for a long time was found to be high for groundnut in Hyderabad
and mustard in Delhi, and for groundnut oil in Rajkot and Chennai. The volatility and
the tendency of volatility to persist for long time was low for groundnut in Rajkot, and
mustard oil in Kanpur and Patna. Volatility was found to be explosive for mustard in
Hinduan market.
 
Date 2016-12-02T10:44:22Z
2016-12-02T10:44:22Z
2011
 
Type Thesis
 
Identifier http://krishikosh.egranth.ac.in/handle/1/88836
 
Format application/pdf
 
Publisher IARI, Division of Agricultural Economics