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Feature
India- a store house of oils and fats
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Tuesday, 06 October, 2009, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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Primarily used for human consumption, vegetable oils and fats are also used in animal feed, for medicinal purposes and for certain technical applications. These are extracted from a range of different fruits, seeds and nuts. Unlike industrial oils and fats, which are mostly produced from petroleum, vegetable oils and fats are usually non-toxic and biodegradable, without requiring any further treatment.
India is the second largest edible oil market in the world after China. Edible oil production in the country is growing at a compound annual growth rate (CAGR) of 4.26 per cent, the output in 2006-07 touched 11.42 million tonnes.
On the other hand, edible oil consumption in the country has risen at a CAGR of 4.25 per cent to 11.45 million tonnes in 2006-07 from merely 4.95 million tonnes in 1986-87.
The different types of oil include coconut oil, fish oil, groundnut oil, mustard oil, olive oil, palm oil, soya oil, rapeseed oil, sesame oil, sunflower oil, soya oil, soya bean oil, spice oil, vanaspati oil and vegetable oil.
Copra, the main product of coconut, is an important source of vegetable oil and contains 65 % oil. Nuts which fully mature give high yields of quality copra. Coconut oil is widely used for edible and industrial purposes. It is also used as a substitute for ghee. The major industrial use of coconut oil is in soap manufacture. In pharmacy it is used as an ointment base.
India ranks third in coconut. According to a consultancy report, from the present production of 12,000 millions, the deficit to be covered is 6000 million nuts. Entrepreneurs can see a huge market potential from this project for entrepreneurs. Virgin coconut oil (extracted from fresh coconut milk, rather than dried copra),Refined coconut oil (oil produced after RBD -refined, bleached, and deodorised), Hydrogenated coconut oil (partially or fully hydrogenated to increase their melting point) and Fractionated coconut oil (most of the long-chain triglycerides are removed so that only saturated fats remain) are different types of coconut oils available.
The domestic coconut oil production is estimated at 4.5 lakh tonnes and its use as edible oil is mostly confined to Kerala Almost 70-75 % coconut oil is consumed in Kerala, whereas other states do not perceive coconut oil as edible. Kerala itself has 7.9 million hectares (20 million acres) of coconut tree plantations that thrive on its sandy soil and warm, humid weather and produced a massive 5.6 billion coconuts in 2007-08. Some 3.5 million families are involved directly or indirectly in the industry.
According to a recent study on consumption in coconut oil, there has been a growth in household consumption. At the same time, it has shown a sharp fall in industrial offtake, due to availability of palm oil at around Rs 25 a kg.
Palm oil is the reddish-orange oil extracted from the fruit and kennel of a palm tree (Elaeis Guineensis), a native to tropical West Africa. It is the most widely produced vegetable oil in the world. This edible oil contains a very high percentage of saturated fat and used in making soaps, margarine, and lubricants, besides being used in cooking.
Since palm oil has been consumed for its nutritional value and health benefits for more than 5,000 years, it is often said as nature's gift to the world. Today, it is the most widely produced vegetable oil of the world. In some Asian countries, it is termed as 'gold oil', for its perfect balance of saturated and unsaturated fatty acids which do not adversely affect cholesterol levels.
Hover according to the Coconut Development Board, dumping cheap palm oil in the Indian market has squeezed the demand for coconut oil mainly from bulk buyers and that in turn has pushed down coconut oil prices to their lowest levels.
Palm oil is almost similar in taste and flavour to coconut oil. Industrial users had slowly shifted to coconut oil when the difference between imported palm oil and coconut oil increased to more than Rs 10 per kg last year, when palm oil prices peaked up due to diversion into the bio-fuel industry.
Groundnut Oil is the major product derived from groundnut, a major oilseed crop of India.
Groundnut oil is extensively used as a cooking medium, as a food constituent and lighting fuel.
Groundnut oil is an excellent source of Vitamin E, mono and poly unsaturated fatty acids and it has better keeping quality than other edible oils like soybean, corn, and safflower oils.
India produced around 10 lakh tonnes of groundnut oil in 2004-05. Ahmedabad, Gondal, Junagadh and Rajkot in Gujarat, Adoni in Rayalseema region of Andhra Pradesh, Mumbai and Delhi are the major trading centres for groundnut oil. Factors like bad weather, crop disease etc, cause low groundnut production, leading to higher prices of groundnut oil. On the other hand, a good harvest leads to oversupply and prices decline.
According to the National Commodity & Derivatives Exchange Limited, the demand of groundnut oil for cooking purpose is reasonably price elastic, as it can be substituted by other cooking mediums, should the price of groundnut oil go up.
Therefore, price of other edible oils like soya oil, mustard oil and sunflower oil affects the price of groundnut oil. Groundnut shipments nosedived 94 per cent to the European Union (EU) in the first five months of the current financial year on strict quality norms adhered by exporters to uplift Indian commodity to global standards.
Normally, India exports about 30,000 tonnes of groundnut to European Union which is estimated to decline significantly because of strict quality norms introduced by Apeda.
The demand and consequently prices of edible oils in India goes up during festive seasons like Deepawali and Dushera. Price movement of other edible oils like palm and soya oil in international markets causes groundnut oil prices also to move to a certain extent.
Currently, sunflower oil is the preferred oil among city dwellers. It is estimated that around four out of every ten cooking-oil pouches sold in Indian cities contain sunflower oil.
India's favoured sunflower oil is dependent upon the availability of domestic crops. This supply is currently limited due to erratic rains and uncertainties of adequate crop yields. In addition, the approaching festival season which demands high consumption.
Southern states alone hold more than 60% of the 100,000 tonnes per annum packaged sunflower oil market in India and within southern states Tamil Nadu has been the single largest market for packaged sunflower oil with 50% market share.
The packaged sunflower oil market is estimated at Rs 600 crore and is growing at 15% to 20% per annum. Over 75% of the Rs 2,800-crore sunflower oil market is dominated by small players.
Bunge India is planning to launch the Rs 5 and Rs 10 sachet packets of refined sunflower oil. With Tamil Nadu being the single largest market for packaged sunflower oil in India and number of good players in the market, the company has decided to take on them through small quantities.
The Indian olive oil market is estimated at Rs 52 crore and is growing at 30 per cent per annum. By 2011, it is expected to touch Rs 200 crore. Spanish companies hold a major share of around 60% in the olive oil market in the
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