External Market Linkages and Instability in Indian Edible Oil Economy: Implications for Self-sufficiency Policy in Edible Oils§ Thomas Lijoa,*, Jha Girish Kumarb, Pal Sureshb aDirectorate of Rapeseed Mustard Research (DRMR), Bharatpur - 321 303, Rajasthan bDivision of Agricultural Economics, Indian Agricultural Research Institute, New Delhi - 110 012 *Author for correspondence Email: lijo.iari@gmail.com
§Part of Ph D thesis entitled “Oilseed Economy of India: The Role of Policy, Trade and Technology” of the first author. JEL Classification: Q11, Q13, Q18 Online published on 19 December, 2013. Abstract The liberalization of the economy following WTO agreement paved the way for significant changes in the edible oil economy. The paper has shown that the impact of the trade liberalization has led to integration between domestic and international edible oil markets. The consequences of this integration on price stability, and production dynamics have been examined. It has been observed that India has tried to balance the interests of both producers and consumers while fixing the import tariffs. The impact of imposition of tariff analyzed in a partial equilibrium framework has revealed that the net impact will be negative, given the current demand-supply parameters of domestic edible oil economy. The implications of these finding include an increase in research investments in oilseed to reduce the need for protecting domestic sector and to create a buffer stock of edible oils to tide over the short-term international price volatilities Top Keywords Oilseeds, edible oils, co-integration, imports, tariff, edible oil policy, market linkage. Top |