Pulses & Oilseeds Crisis

Why in the News?

1. In many parts of India, farmers who grow pulses and oilseeds are facing twin  problems.
   1.   Lack of government procurement as compared to rice and wheat
   2.   High import of pulses and oilseeds from abroad
2. They work hard to grow crops like moong (green gram), soybean, chana (chickpea), and masoor (red lentil) but they do not get a good price for their crops.
3. The government declares a Minimum Support Price (MSP) for these crops but there is no proper system to buy them at that price.
4. Wheat and rice are bought by the government in large amounts, but not pulses and oilseeds. So, farmers have to sell their crops in the market at lower prices.
5. At the same time, India is importing a lot of pulses and vegetable oils from other countries.
6. These imports are growing even though farmers in India are already producing.                                                   

What are the Key Highlights?

1.  Pulses Imports
   1. 2015-16: Pulses production was low at 16 million tonnes (mt) due to drought-like conditions.
   2. 2016-17: India imported 6.6 mt of pulses worth $4 billion, the previous highest record.
   3. 2017-18 to 2022-23: Imports declined to an average of 2 mt per year.
      1. This was due to better domestic production, supported by improved chana and moong varieties.
      2. Production rose steadily, reaching a peak of 27 mt in 2021-22.
   4. 2023-24: An El Niño-induced drought reduced production to 24 mt.
      1. Retail prices of pulses started rising, crossing into double-digit inflation.
   5. Mid-2023: To control rising prices, the government cut import duties on pulses. This decision boosted imports to meet consumer demand.
   6. 2024-25: India imported a record 7 mt of pulses, valued at $5 billion.
   7. Major imports included:
      1. 2 mt of yellow/white peas (from Canada and Russia)
      2. 1.5 mt of chana (from Australia)
      3. 1 mt each of arhar and masoor
      4. 0.8 mt of urad
   8. Domestic production slightly improved to 25 mt.
   1. Late 2024 to Mid-2025:
      1. Inflation in pulses dropped sharply, turning negative by early 2025.

1. 1. 2. However, mandi prices fell below MSP, hurting farmer incomes.
      3. Example: arhar and chana were sold below MSP in Latur mandi.
2. India’s journey toward self-sufficiency in pulses saw significant improvement between 2017 and 2022, with production rising due to better chana and moong varieties.
3. However, a drought in 2023-24 reduced output, triggering high retail inflation. To control prices, the government slashed import duties, leading to record pulses imports of 7 million tonnes in 2024-25.
4. While inflation eased, the influx of cheaper imports pushed mandi prices below MSP, causing distress for domestic farmers.
5.  Vegetable Oil Imports:
   1. 2013-14:
      1. India imported 8 million tonnes (mt) of vegetable oil.

1. 1. 2. The import bill stood at $7 billion.
   2. 2014–2022:
      1. Vegetable oil imports steadily increased over the years.

1. 2. 2. The Russia-Ukraine war in 2022 caused global supply disruptions, leading to a sharp rise in international prices.
      3. By 2022-23, import value nearly tripled to $20.8 billion.
   3. 2024-25:
      1. India imported a record 16.5 mt of vegetable oil, doubling the quantity compared to 2013-14.

5. 3. 2. The composition of imports included:
         1. 8 mt of palm oil (from Indonesia and Malaysia)
         2. 5 mt of soyabean oil (from Argentina and Brazil)
         3. 3.5 mt of sunflower oil (from Russia, Ukraine, and Argentina)
      3. Meanwhile, domestic production of edible oil (from oilseeds and by-products like cottonseed, rice bran, and maize) remained around 10 mt.
      4. This resulted in a more than 60% dependence on imported oils.
   4. Despite a decline in global prices post-2022, India’s oil imports have continued to rise steadily, reflecting persistent structural dependency on external sources.
6. India’s growing dependence on imported vegetable oils highlights a serious structural weakness in its agricultural system.
7. Despite efforts to boost domestic production, the country remains unable to meet its own edible oil demand.
8. Even as global prices stabilize, India’s import volumes continue to rise, leading to high import bills and exposing the economy to global market shocks.
9. This situation underscores the urgent need to strengthen domestic oilseed cultivation and reduce reliance on foreign sources to ensure long-term food and economic security.
10. Inflation and Government Response
    1. Vegetable oil prices began to rise quickly in November 2024, and since then, the price increase has stayed above 10%.
    2. The rise in prices reached 18% in May 2025,
    3. The government took steps to reduce prices on May 30, 2025.
       1. It reduced the basic basic customs duty from 20% to 10%.

10. 3. 2. It also cut the total import tariff (including extra charges) from 27% to 16%.
    4. The government reduced import duties on vegetable oils to control rising prices, which had stayed above 10% since November 2024 and peaked at 18% in May 2025.
    5. This move aimed to make edible oils cheaper for consumers, though it may also increase dependence on imports and hurt domestic oilseed farmers.
11. Global Outlook and Impact:
    1. The US Department of Agriculture (USDA) expects:
       1. Lower duties will lead to more soybean oil imports in India.

1. 1. 2. This could help US soybean oil enter India’s market more easily.
   2. Global vegetable oil production is projected to reach a record 235 mt in 2025-26:
      1. Palm oil: 80 mt

1. 2. 2. Soybean oil: 70 mt
   3. Global vegetable oil production is expected to reach record levels in 2025-26, and lower import duties in India will likely increase soybean oil imports.
   4. This creates an opportunity for countries like the US to export more to India. However, it may also raise concerns about rising import dependence and challenges for domestic oilseed farmers.

What are the Challenges and Way Forward?

Conclusion

The current crisis highlights the urgent need to prioritise self-reliance in pulses and oilseeds. Policy efforts must shift from short-term fixes to long-term resilience. Empowering farmers with fair prices, assured procurement, and better technology can ensure sustainable outcomes. A stable and supportive ecosystem is essential for bridging the gap between production and market reality.