edible oil
TRANSCRIPT
PATH OF PRESENTATION
OVERVIEWGLOBLE SCENARIO
STRUCTURE OF INDUSTRYSEGMENTATION OF EDIBLE OILS
PRODUCTION STATISTICSOIL EXTRACTION & EXPRESSION METHODS
SWOT ANALYSIS OF EDIBLE OILSEED SECTORDEMAND FOR EDIBLE OILS
AVAILABILITY OF EDIBLE OILSCONSUMPTION PATTERN OF CONSUMERS
IMPORT & EXPORTSTATUTARY REGULATIONS & DUTY REGIMES
EDIBLE OIL: ON THE BOILRECOMMENDATIONS FOR MARKETING
FECTORS FOR FUTURE
INRODUCTION
US CHINA
BRAZIL
INDIA
•Rs.600 billionTotal
market size
•Rs.130 billionImport-Export trade
•90 %CAGR
Share in GDP
Share in Agri GDP
Share in AreaGround
nutSoybea
n
• 7%
•14 million farmers involved
Oilseed Cultivatio
n
•1 million farmers involved
Oilseed Processin
g
•14.4% in import•48.8% in export
Contribution in
Agriculture
•2.2% in import•1.6% in export
Contribution in nation
GLOBAL SCENARIO
• Share in world oilseed area - 15.6%• Share in world oilseed production - 9.2% • Share in world oilseed output - 7.4%• Share in world oil meal production - 6.8%• Share in world oil meal export - 3.9%• Share in world vegetable oil production - 5.9%• Share in world vegetable oil import - 11.2%• Share in world’s edible oil consumption - 9.3%
5
Type of Vegetable Oil Industry
No. Of Units Annual capacity (Lakh MT)
Average Capacity Utilization
Oilseed crushing units
1,50,000 425 10-30 %
Solvent extraction unit
711 313 31 %
Refineries attached with Vanaspati Units
127 51 45 %
Refineries attached with solvent Units
297 36 27 %
Independent Refineries
585 35 36 %
Total Refineries 1009 122 35 %
Vanaspati units 264 53 18 %
Sources : Directorate of Vanaspati, Vegetable Oil & Fats
STRUCTUTRE OF INDUSTRY
Vanaspati Vegetable Oils
Capacity 27,20,000 3,03,68,000
Production 9,90,534 62,50,000
Utilisation 36% 21%
Installed Capacity and Prodution (MT /year) (2005-06)
CONT….
Item Potential*(in Lakh MT)
Production(in Lakh MT)
Untapped potential
(in Lakh MT)
Rice bran 9 5 4
Cotton seed 8.8 5 3.8
Oils from tree origin 6 1 5
Oilcakes 7 2.5 4.5
Total 30.8 13.5 17.3
Potential from Non Traditional sources
By Pack
Loose
Packaged
SEGMENTATION OF OILS
By Type
Conventional
Non conventional
Blended Edible Oil
PRODUCTION STATISTICS
(State – wise)
*Total Production : 24289.4 (in ‘000 tonne) * Total Area : 26512.7 (in ‘000 hactare)
Source : Ministry of Agriculture, GOI (2006 - 07)
Mad-hya
Pradesh
6086.7(23%)
Ra-jasthan
4508(17%)
Maharashtra3863(15%)
Andhra Prades
h2235(9%)
Gujarat2228(9%)
Others6991.3(27%)Madhya
pradesh; 5814.2; 24%
Gujarat; 2569; 11%
Rajasthan; 5166.8; 21%Maha-
rashtra3721.0
15%
Andhra Pradesh; 1362; 6%
Others; 5656.4; 23%
CONTI….....
(Crop – wise) (in ‘000 tonns)
• Source: Ministry of Agriculture, GOI ( 2006 - 07)
Groundnut; 5615.1; 21%
Castorseed; 628.4; 2%Nigerseed;
469; 2%
Sesamum; 1703.2; 6%
Rapeseed & Mustard; 6790; 26%
Linseed; 436.5; 2%
Safflower; 377; 1%
Sunflower; 2164.4; 8%
Soybean8328.7
31%
Groundnut
Castorseed
Nigerseed
Sesamum
Rapeseed & Mus-tard
Linseed
Safflower
Sunflower
Soyabean
CONTI…..
Average productivity of major oilseed crops in country (Tonn/ ha)
• Source : Oil World, August 2001
Soyabeans Cotton seeds Groundnut Sunflower Rapeseed/ Mustard
0
0.5
1
1.5
2
2.5
3
3.5
0.860000000000001
0.59 0.58
0.640000000000006
0.750000000000005
2.31
1.06 1.011.17
1.51
EU -153.34
Australia2.11
China2.08 EU - 15
1.73
EU – 152.98
IndiaWorld AverageHighest
CONTI..
1996-97 1997-98 1998-99 1999-00 2000-2001
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-080
10
20
30
40
50
60
7061.3
5760.4
50.346.1
50.22
38.78
58.9 59.862.9
6065.7
Edible oil Production (in Lakh tonn)
CONTI…..
• Total Edible oil Production : 65.7 Lakh Tonn (2007-08) (Source : Ministry of Agriculture)
12.8; 20%
16.8; 26%
1.6; 2%0.5; 1%5.1; 8%
14.4; 22%
0.1; 0%4.2; 6%
10.1; 15%
2007-08 Groundnut
Mustard
Sesamum
Safflower
Sunflower
Soybean
Nigerseed
Coconut
Cottonseed
Oil Extraction and Expression MethodsSTORAGE
CLEANING
DEHULLING
GRINDING
HEATING
PRESSING
REFINING
PURIFIED EDIBLE OIL
OIL CAKES
IMPURITIES
SWOT ANALYSIS FOR INDIAN EDIBLE OILSEED SECTOR
STRENGTHS WEAKNESSES Diverse agro – climatic situations Strong research network for development of oilseed technology Extension network for technology dissemination Production and distribution of quality oilseeds Human resource development Initiative from oil industry
Production situation
System constraints in public sector Transfer of oilseed technology
Processing situation
OPPORTUNITIES THREATS Production situation
Processing situation
Supplementary oil sources
Production situation
Processing situation
STRENGTH
• Diverse agro – climatic situations• Semi arid ecosystem > 50% of area
> 55% of prodn.• Sub humid & arid ecosystem ~ 20%
• Strong research network for
development of oilseed technology• In 1967, AICRP on oilseed ( 5 crops)• In 1972, 3 more crops• In 1977, Project Directorate• In 1979 & 1993, NRCs for groundnut
& mustard respectively.
Strong frontline extension network for technology dissemination
• Technology mission on oilseeds (TMO)• Integrates scheme on Oilseeds Pulses,
oilpalm and Maize (ISOPOM)• Prodn & Distribution of quality seeds Impact of technology
• Human resource development• Initiatives from oil industry• Contract farming – Punjab (100 acres) • SEA of Punjab with Punjab Agro –
Industries Corporation – projects.• SOPA, COOIT - Platform for
researchers, technocrats,
industry representatives and consumers.
WEAKNESS
• Production situation• 76% area under rainfed condition• Present level of seed replacement (6
– 8%)• Prone to 64 major diseases• Absence of market mechanism to
hedge the yield risk• System constraints in public sector
Transfer of oilseed technology- Multiplicities of technology transfer- Narrow focus of agricultural
extension system- Lack of an effective feedback system
- Little attention to disseminate oilseed technology
- Farmers Training Centre- Poor extension linkage- Ineffective communication- 90% of budget is allocated to salaries
and personal emoluments
• Processing situation• Outdated technology• Lower rate of utilization of installed
capacity• Low oil recoveries• High unit cost
OPPRTUNITIES
• Production situation• Encouraging germplasm front
with high level of resistance 19 (29.6%) and partial resistance 33 (51.5%)
• Extending oilseed cultivation in underutilized farming conditions
• Contingency farming
• Processing situation• Value addition• Increase oil recovery• Scope for by - products
• Supplementary oil sources
• From non traditional oil sources.
THREATS
• Production situation• Insufficient domestic supply• Continuous cultivation
without any crop rotation• Vagaries of monsoon and
pestilence• Liberalization of export
import policies
• Processing situation• Underutilization of
resources• Lack of assured market for
oilseeds• The standards set by import
countries are very high (Trade barriers)
DEMAND FOR EDIBLE OILS
•
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
2008-09
2014-150
5
10
15
20
25
Vegetable oil (mn MT)
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
2008-09
2014-150
500
1000
1500
2000
2500
Vanaspathi (in '000 MT)
DEMAND PROJECTION FOR FUTURE
According to NCAER,• Edible oil demand - 20.16 m ton/annum in the next 7 years, given
6% rise in per capita income. (Presently – 12.5 mton /annum)• Increase in per capita consumption 4% population = 1.8% overall growth in demand = 6%• This means present level of production needs to be increase by three times to meet the projected demand. (Projection made by Rebo bank for DAC)
2010 2015 20200
5
10
15
20
25
14.8
18.3
21.8
Edible oil demand (in mton)
AVAILABLITY OF EDIBLE OIL
Source : Solvent Extractors Association of India & Ministry of Agriculture
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008(E)
0
50
100
150
200
250
300
184.4
206.63
148.39
251.86243.54
279.789999999999
242.89
282.08
54.99 61.4646.64
71.4 72.4783.16
73.784.27
96.76104.68
90.29
124.3 117.89126.04
115.87 121.91
Production of Oilseeds in mT
Net availability of edible oils from all domestic sources in mT
Consumption of Edible Oils (from domestic and import sources)in mT
CONSUMPTION PATTERN OF CONSUMERS
US CHINA BRAZIL INDIA0
10
20
30
40
50
60
48
21.3
12.5 10.6
Per capita consumption (Kg/Annum)
CONT…..
32%
20%17%
7%
24%
Consumption Pattern
Palm oil Soya oil Rapeseed oil cottonseed oil others
•
28%
26%24%
22%
Edible oil
North East West South
45%
17%
26%
12%
Vanaspati
IMPORTS AND EXPORTS
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-080
1000000
2000000
3000000
4000000
5000000
6000000
4393421 44949534833808
4425182
5114449
4396587
5041607
44168334714760
5608410
Import of Edible oils (in MT)
Edible OilsYear 2006 - 07
Import from Countries During (2006-2007)Qty (lakh
Tonne) Value (cr. Rs.)
Soybean Oil 12.16 3103.68Argentina, Brazil, Indonesia, UAE,
Bangladesh, Nepal, USA China, Germany, Netherland
Palm Oil 27.66 5629.14Cambodia, China, Indonesia, Malaysia, Morocco, Sri Lanka, Bhutan, Singapore,
Bangladesh, UAE
Sunflower Oil 1.41 422.98Argentina, Russia, Ukraine, Germany, Japan,
Singapore UK, USA
Coconut Oil 0.15 51.86 Malaysia, Indonesia, Philippines
Other Oils 1.36 372.87
USA, Indonesia, Malaysia, Sri Lanka, Pakistan, Canada, Italy, Bangladesh, Neal, Belgium, Brazil, Georgia, Germany, Uk China, Czech,
Republic, France Japan, Switzerland, Singapore, UAE, Thailand, Republic of Korea,
Sweden, Estonia, Oman, Spain, Greece, Portugal, Netherlands, Australia
India 42.74 9580.53
EXPORTS
2002-03 2003-04 2004-05 2005-06 2006-070
10
20
30
40
50
60
70
80
90
22.77
40.18
33.6
50.59
73.04
26.53
54.49
46.1252.13
79.97
Exports of Oilseeds, Minor Oils and Fats and Oil Meals from India
Qty .(in Lakh Tonne)Value (in '00 Crore)
CONT..
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-080
1000000
2000000
3000000
4000000
5000000
6000000
4139754
3311139
24284702336638
3020777
1896521
3323025
2690201
4423025
51707005442132
Oilmeal Export(MT)
30
STATUTARY REGULATIONS
VEGETABLE OIL PRODUCTS ORDER, 1998
Removal of multiple authorities and agenciesRemoval of BIS certificate
EDIBLE OILS PACKAGING ORDER1998
to sold only in packed be Packers will have to register themselves, pack will have to show all relevant particulars.
SOLVENT EXTRACTED OIL, DE-OILED MEAL AND EDIBLE FLOUR (CONTROL) ORDER, 1967
DUTY REGIMES
Custom DutyEdible oil Custom Duty
crude and refined forms of Palm Oil, Palmolein, Palm Kernel Oil, Soybean Oil, Rapeseed/Mustard Oil, Sunflower Oil, Safflower Oil, Groundnut Oil, Coconut Oil
Reduced to 0%
all grades of olive oil Reduced to 7.5% (Previously – On virgin olive oil – 45% On Refines olive oil-40%
other Vegetable Oils. Reduced to 7.5%
CONTI…
Import duty
Edible oils WTO Bindings
Current rates ofduty on CrudeEdible Oils
Current rates ofduty on RefinedEdible Oils
Virgin Olive oil 45% Nil 7.5%Other Olive oil 40% Nil 7.5%Soybean Oil 45% Nil 7.5%Palmolein, Palm oil, Groundnut oil, Sunflower oil, safflower oil, coconut oil
300% Nil 7.5%
Rapeseed / Mustard oil 75% Nil 7.5%
CONTI…
• Value Added Tax (VAT)• Differences in the percentage rates and rules
from State to State.• 4% VAT + Octroi + Local Taxes = 6 – 7% Export-Import Measures
EDIBLE OIL : ON THE BOIL
FECTORS FOR FUTUREDemand Drivers # Macroeconomic factors -Population growth, per capita income, purchasing
power, oilseeds crop
# Other factors :Prices - Domestic/ International, Availability - oil, oilseeds
# Influence of branded products :`health’ message
# Growing preference for convenience foods
Key Success Factors # Raw material sourcing : improving yields, better quality oilseeds, regular supplies
# Branding for success :(Vanaspathi - Dalda, Oils - Sundrop)
# Better distribution network to improve reach
# Efficiency in operation: price competent and withstand overseas competition# Future trading : increase volatility
Future Next 5 Years, Edible oil – 6 -8% growth in demand.
Business Concern low import duties : lead to dumping
low realisation and idle capacities
Production slippages: forced to import
Excessive (cheap) imports: led to unremunerative prices, locally
farmers have shifted to other cash crops
Increasing health awareness : cholesterol level in oil.
MARKET SHARE OF MAJOR PLAYERS
Source: Ruchi soya
CONTI…
PLAYER BRANDS
Ruchi Soya Mahakosh, Nutrela, Nutri – Gold, Ruchi No. 1
Adani Wilmar Fortune, Raag
K. S. Oils Kalash, Double Sher, K. S. Gold
NDDB Dhara
Agro Tech Foods
Sundrop, Crystal, Rath, Sudham
HUL Dalda
Prakash Foods Gemini, Samrat, Anand, Dosti
Marico Saffola, Sweekar
RECOMMENDATIONS FOR MARKETING
• Better enforcement of regulated markets
• Strengthening the appropriate market institutions
• Introduction of forward marketing and contract farming
• Promotion of market integration
• Price incentives for edible oil shortage
• Better management of edible oil price fluctuation risk during shortage
• Improving quality of information and efficiency of its dissemination
• Rewarding better quality produce
• Strengthening regulations regarding quality
• Enhancing earning from oilcakes and oilmeals.
REFERENCES
• SAARCs OILS & FATS (March 08, July 08, August 08)• www.cooit.org• www.sea.nic.in• www.fcamin.nic.in• www.indiaagristat.com• www.indialawoffices.com
THANK YOU
• THANK YOU
EDIBLE OILS9.6mMT
OILS8.61mMT
SUNFLOWER43%
MUSTARD23%
GROUND NUT14%
KARDI 9%
SOYA9%
OTHER2%
VANASPATHI0.99mMT
• Top 10% population > 20 Kgs / capita• Bottom 30% population < 5 Kgs / capita
PACKAGED EDIBLE OILS
• With growing quality consciousness and plummeting price, the packaged edible oil sector will capture 50% of the market share within three years.
• The packaged edible oil consumption is only about 20% of the total 12.5 million tonne domestic consumption.
STATUTORY REGULATIONS
• Vegetable Oil Products (Regulation) Order, 1998
• dated 16-12-1998 replacing the earlier two Control Orders, namely, the Vegetable Oil Products (Control) Order, 1947 and the Vegetable Oil Products (Standards of Quality) Order, 1975
• Edible Oils Packaging (Regulation) Order, 1998• to ensure availability of safe and quality edible oils in packed form to the
consumers
• Solvent Extracted Oil, De-oiled Meal and Edible Flour (Control) order, 1967.