Edible Oils Industry in India – A Complete Overview

The Indian edible oil economy is the world’s fourth-largest after the U.S, China, and Brazil. India is harvesting about 25 million tonnes of the oilseed in the world. India shares 10 percent in terms of oilseed world production since 1995. One of the major producers of the oilseed in the world is India and its per capita consumption is 10.6kg per annum, which is low as compared to 12.5kg per annum in China, 20.8 kg per annum in Japan, 21.3 kg per annum in Brazil, and 48.0 kg per annum in the USA.

Edible oil consumption has increased in the year 2021 due to the increasing domestic demand. India fulfills its domestic demands by importing edible oils and because of these imports, India became the third-largest edible oil importer. India buys soya oil from Argentina and Brazil and palm oil from Malaysia & Indonesia.

At present, India accounts for 11.2% of edible oils imported and edible oil consumption is 9.3 percent.

Types of edible oils commonly used in India

India has a variety of crops grown in different agro climate areas. Some of the major traditionally cultivated seeds in India are groundnut, mustard/rapeseed, sesame, safflower, linseed, niger seed/castor seed. Soybean and in recent years, sunflower have also gained importance in the country.

Groundnut, soybean, and mustard together share about 85 percent of oilseed production in India. One of the most important plantation crops in India is coconut. Palm oil is also grown in  Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, and Andaman & Nicobar Islands. The most important non-conventional oils are rice bran and cottonseed.

The olive oil sector in India was especially unrecognized until 2002. In India, the olive oil industry is small, and widely Indian people use it for cosmetic purposes rather than cooking. In the current scenario, people are walking towards better cooking mediums like olive oil for health and wellness reasons.

Olive oil has been placed somewhere between food and medicine but the real challenge is to educate Indian consumers about the benefits of olive oil as a cooking medium. The olive oil consumption is seen rising at a rate of 25% annually.

Oilseeds production in India

India is one of the largest producers of oilseeds in the world and holds a crucial place in the agricultural economy with a production rate of about 28.21 million tonnes during 2007-2008. India shares about 10% of the world’s oilseed production.

During the financial year 2021, 36 million metric tonnes of oilseeds were produced in South Asian countries. The soybean was the highest produced oilseed with over 13 million metric tonnes in the same year.

Process of edible oil Manufacturing

The production process of edible oil involves the removal process of oil from plant components, generally seeds. The process can be done via mechanical extraction or by chemical extraction using a solvent. The extracted oil then can be purified and if required, refined or chemically treated.

Mechanical extraction refers to crushing or pressing, India uses the Ghani method.

In commercial use, vegetable oils are usually processed by chemical extraction, using solvent extracts, which give higher yields and are faster and less expensive. The most common solvent is petroleum-derived hexane. This technique is mostly used for “new” industrial oils such as soybean and corn oils.

Edible oil consumption in India

The annual per capita consumption of edible oils in India is 19kg per year based on the per capita consumption figures. India has an annual demand for edible oil of 25 million tonnes out of which only 10.5 million tonnes is only supplied by domestic production, the rest is fulfilled by imports. Palm oil is the second-largest source of edible oil used by Indians, followed by soybean oil. Together they add up to 65% to 75% of usage.

Geographically uses of edible oils

The consumption of edible oil is slightly higher in West India and less in South India; however, the usage corresponds to the distribution of population. On a comparative basis, palm oil is not preferred in North India, whereas sunflower oil is preferred in South India in comparison to soybean oil and mustard oil.

Edible oils imports in India

The import of edible oils in India has grown at 8.4% CAGR over the last few years. Broadly speaking, the share of refined oil in imports is 15% of total imports. The remaining crude edible oil is refined in the local units. The current duty differential between CPO (crude palm oil) and RBD (refined, bleached, and deodorized) is 7.5%, which protects domestic refiners from competition from imported refined oils to a certain extent.

The Import breakup of edible oils

Palm oil is one of the major imported oil in India but lately, soybean oil imports have also increased.

Edible oils account for more than half of India’s total agricultural imports. Despite being the 5th largest producer of oilseeds in the world, India is today the largest importer of vegetable oils. India‚Äôs edible oil import bill is around Rs. 70,000 crore annually! Improving our foreign exchange reserves is an easy task for the government.

What if India improves its yields?

A simple calculation shows that if our yields improve from the current situation to the global average yields, Indian edible oil production will increase by 67% to 13.5 million tonnes in the same area of cultivation.  And if our production grows at the best rate globally, Indian edible oil production will be 3 times the current production of 8-9 million tonnes and India will be self-sufficient on the current arable land!

Edible oil imports in 2022

In the 21st-century people are becoming more and more dependent on the methods which make their work effortless. Keeping this fact in mind, the world’s first next-generation B2B procurement platform for food products and agri-commodities has been introduced called, where you can import edible oils with ease without making calls or e-mails. The process is effortless and you can import edible oils anywhere in the world from 38K+ verified ready-to-sell edible oil sellers from all over the world. And in the same way you can export edible oil too.

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