The Indian Edible Oil market is currently the fourth largest in the world. Being an essential commodity for day to day consumption, edible oil also has a traditional market in rural India. Historically the consumption has been limited to locally produced edible oil or a few local brands. However a renewed thrust from the FMCG majors has made the local rural market a battleground for control. The study attempts to understand the dynamics of this market.
Abhishek Dalvi Mehul Panchaal
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Edible Oil – Consumption pattern from a Rural perspective
INTRODUCTION – FACTS & FIGURES
The Indian edible oil market is the world’s fourth-largest after the USA, China and Brazil. A growing population, increasing rate of consumption and increasing per capita income are accelerating the demand for edible oil in India.
India is a leading player in edible oils, being the world’s largest importer (ahead of the EU and China) and the world’s third-largest consumer (after China and the EU).
Each year, India consumes over 10 million tonnes of edible oils. Edible oils have a high penetration of 90% in India. However, per capita consumption of edible oils is around 11 kg per year. This is considerably lower than in most developed countries.
Palm oil (mainly imported) and soya bean oil account for almost half of total edible oil consumption in India, followed by mustard and groundnut oil.
In India, most vegetable oil is purchased by household or industrial buyers (food processors, restaurants and hotels) for frying or baking needs and is sold as loose oil or vanaspati (partially hydrogenated vegetable oil). Only a small percentage of edible oils are sold in branded form at the retail level.
In India consumer oil preferences vary from region to region because preference is based on local cultivations. India is fortunate in having a wide range of oilseed crops grown in its different agro-climatic zones.
Groundnut, mustard/rapeseed, sesame, safflower, linseed, Niger seed/castor are the major traditionally cultivated oilseeds. Soya bean and sunflower oils have also assumed importance in recent years. Coconut is the most important amongst the plantation crops. Among the non-conventional oils, rice bran oil and cottonseed oil are the most important.
* Per capita consumption of edible oil is low (11 kg) – but rising gradually; * Extreme variation in consumption. The country’s top 10% of the population * consumes 20 kg per capita and the bottom 30%, less than 5 kg per capita; * Strong regional preference for ‘first press’ oils with natural flavour – mustard, * groundnut, coconut oils;
* Inadequate quality control and quality assurance mechanisms lead to * adulteration;
* Antiquated food laws and poor implementation;
* Low depth liquidity in futures markets;
* Erosion of self-reliance in edible oils and rising dependence on imports. Imports * currently constitute 45% of aggregate consumption
Major Market Player
National Dairy Development Board (Anand)
| Hindustan Lever (Mumbai)
| ITC Agro-Tech (Secunderabad)
| Wipro (Bangalore)
Marico Industries (Mumbai)
| Rasoi (Calcutta)
India is one of the largest producers of oilseeds in the world. The oilseeds area and output is concentrated in Central and southern parts of India, mainly in Madhya Pradesh, Gujarat, Rajasthan, Andhra Pradesh and Karnataka. In India, oilseeds are grown in an area of nearly 27 million hectares across the length and breadth of the country.
India ranks second in the world (after China) in groundnut production. The three southern states of Andhra Pradesh, Tamil Nadu, Karnataka and the western state of Gujarat together account for close to 80% of the annual output in India.
Regional trends in groundnut production indicate that the...
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