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India has successfully covered forty-seven per cent of its targeted area for oil palm expansion in the current fiscal year. The Indian government remains optimistic about hitting the final goal of 1.19 lakh (119,000) hectares set for 2026-27, especially as Bihar has officially joined the National Mission on Edible Oils – Oil Palm (NMEO-OP).
According to official data, out of the 55,614 hectares brought under oil palm cultivation this fiscal, six north-eastern states—Arunachal Pradesh, Assam, Manipur, Mizoram, Nagaland, and Tripura—accounted for 23,347 hectares. Nine other states contributed 32,267 hectares, led by Telangana with 14,919 hectares and Andhra Pradesh with 12,652 hectares, followed by smaller contributions from Odisha and Chhattisgarh.
The expansion is viewed as a strategic milestone for India's oilseed programme, as oil palm is more resilient to adverse weather conditions compared to field crops such as soybean, groundnut, and mustard. Sunil Kataria, MD & CEO of Godrej Agrovet, noted: 'While Andhra Pradesh and Telangana continue to lead, newer geographies are now emerging as important growth centres. Equally encouraging is the focus on scientific expansion, ensuring that plantations are established in suitable agro-climatic zones and supported by reliable irrigation infrastructure.'
Kataria highlighted that Fresh Fruit Bunch (FFB) prices have surged from approximately ₹12,500 per tonne in 2023 to nearly ₹20,000 per tonne today, significantly boosting returns for farmers. The NMEO-OP mission, launched in August 2021, targets an increase in crude palm oil production to 11.20 lakh tonnes by 2025-26. The scheme's funding is shared between the central and state governments in a 60:40 ratio for general states and 90:10 for the north-eastern region.
While the Centre has released ₹583.23 crore to states out of a ₹757.62 crore allocation for this year, total utilization remains below 40% so far, though states like Kerala and Mizoram have utilized over 50%. The mission includes a Viability Gap Payment (VGP) to protect farmers from market price fluctuations, alongside financial assistance of up to ₹100,000 per hectare for planting materials and management, and ₹290,000 for harvesting tools.
Addressing the three-to-four-year gestation period before palm trees reach commercial yields, Kataria suggested that intercropping with short-duration crops like vegetables and pulses is vital for providing interim income. He further emphasized that processing infrastructure, including mills and collection centres, must expand alongside plantation development because FFBs must be processed within 24 hours of harvest to maintain oil quality.
Source: TradingView