Page 548 - ES 2020-21_Volume-1-2 [28-01-21]

Prices and Inflation 175

domestic production is almost stagnant, due to which dependence on imports has increased
over the years (Figure 15). This is risky as problems in the world market may have serious
repercussions on the domestic market. Effective measures to increase domestic production
are necessary to reduce import dependency (CACP, 2020). Imports in 2020 were affected
as Malaysia and Indonesia imposed export tariffs on crude palm oil. This affected domestic
prices of palm oil from Jan-Jun 2020.

Figure 15: Import of edible oils

*Till September
Source: Solvent Extractors Association of India.

5.20 Escalation in wholesale prices was also witnessed after the COVID-19 induced
restrictions possibly because of labour shortages on account of reverse migration, social
distancing in factories, and other transaction costs in the production and distribution network.
Although production of total oilseeds is estimated to have increased in 2019-20 and 2020-
21, production of soyabean has declined significantly in 2019-20. The kharif production
of sunflower for 2020-21 is estimated to have declined as compared to the previous year.
The production of sunflower has been declining continuously over the years, and only a
marginal increase has been observed in 2019-20. Production of mustard also has declined
in 2019-20.
5.21 The variations in the prices of essential food commodities are experienced by the common
man through its impact on the households’ food budget. An attempt was made in this regard to
assess the cost of a plate of food in Vol-I, Economic Survey, 2019-20 in the form of Thalinomics
(Box 2).