Present status of edible oil consumption and household demand projection for Tamil Nadu (India)

Abstract

Until the 1990s the major edible oil consumed in Tamil Nadu state was peanut and sesame oil. The technological, economic and policy changes thereafter induced dynamism in consumer demand for food, including edible oils. In this study, the household demand for individual edible oils based on present consumption was assessed and forecasted for 2015 and 2020 for Tamil Nadu. Due to constraints in the secondary data published by National Sample Survey Organisation (NSSO), the primary data was used. The Almost Ideal Demand System (AIDS) model was employed to estimate the income (expenditure) elasticities and in turn used to project the demand for edible oils and associated products like ghee and butter. The overall edible oil demand is expected to grow at 7.0% per annum in Tamil Nadu, with the highest growth of sunflower oil (8.7%) followed by other oils (7.8%), sesame oil (6.6%), peanut oil (6.6%) and palm oil (3.1%). The demand for total edible oil in rural Tamil Nadu increases from 3.14 lakh tonnes (2009-10) to 5.3 lakh tonnes (2020), whereas, in urban areas, it increases from 3.24 lakh tonnes to 5.45 lakh tonnes. The non-traditional oil like sunflower oil and other oils (soybean, corn, rice bran, palm oil) has made inroads in the consumption basket and will continue to dominate in the future. Hence, concerted efforts like increasing seed replacement rate, increasing the intensity of adoption of improved technology and appropriate price policy are required to increase productivity of non-traditional crops besides promoting traditional crops (peanut and sesame) to meet the growing edible oil demand in the state.

Keywords

• edible oil
• almost ideal demand system
• household demand
• elasticities
• Tamil Nadu