Problem of plenty for solvent extractors

Vijay C Roy

Tribune News Service

Chandigarh, May 20

“There was hardly any impact on the solvent extractors as they were allowed to operate during the lockdown being in the essential industry category. However, the poultry industry crashed and it led to decline in demand for poultry feed,” said AR Sharma, Chairman, Sangrur District Industrial Chamber.

The price of de-oiled cake crashed by almost 30% amid the slump in demand. According to Sharma, because of huge inventory their precious working capital has been blocked. The liquidation of the stock would depend on how fast the poultry industry revives.

The extractors use rice bran and mustard for processing oil. Rice bran oil is produced from rice chaff — an oily layer between the paddy husk and the rice grain. The process involves a long chain where farmers sell paddy to rice millers. Millers sell the chaff to solvent extractors, who further sell it to the refiners. The refiners process it into oil.

As the units were operational during the lockdown, the industry was able to retain the migrant manpower. However, they witnessed shifting of labour from one job to another, leading to some disruption in production.

“Solvent extractors across the two states had to reduce their operating capacity to 30-40% initially due to disruption in raw material supply and labour shortage. The daily-wage workers preferred to work in mandis to earn more during the wheat procurement season,” said another extractor requesting anonymity.

With the procurement season almost over, many labourers have returned to extractors and as a result their capacity utilisation has reached 60%.

The processors are of the view that there is a huge potential for solvent extractors in Punjab and Haryana. If Punjab aims at producing just 10-20% of domestic market potential for vegetable oils, the entire area of Punjab under rice and wheat cultivation will get shifted to oilseeds’ cultivation.

BV Mehta, Executive Director, Solvent Extractors’ Association of India, said India’s total consumption of edible oils is 23 million tonnes, of which domestic production stands at 7.5 million tonnes and the rest is met through import.

The increase in oilseeds’ cultivation will not only save precious foreign exchange worth Rs 73,000 crore annually but also provide the much-needed raw material to the extraction industry, which is currently operating at 35% capacity, said Sharma.

Since oilseeds crushing and extraction industry is a labour-intensive industry, additional capacity utilisation will provide job opportunities to a large number of people.