cooking oil usage pattern in india avishek singal nimal nithyanandham ram mohan m.p ratnavel...

Cooking Oil Usage Pattern in India

Avishek SingalNimal Nithyanandham

Ram Mohan M.PRatnavel Subramanian

Praxis Business School

AGENDA

• What are cooking oils?

• The consumption and production in India

• The trends in oil demand

• The future

• Reasons

• Conclusion

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What are the cooking oils?

• Cooking/Edible oils constitute a huge variety of oils extracted

from various natural sources like nuts, citrus, melon & gourd

seeds etc.

• The major differentiating factors in usage of these oils are:

– Availability

– Cholesterol content

– Taste

– Smoke point

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Consumption and Production in India

• Annual consumption - 17.55 m tons (Risen by 6% over last year’s usage)

• Total market size - Rs. 60,000 cr

• Total import-export trade - Rs.13,000 cr

• India’s packaged edible oil market - Rs. 24,000 cr (as per industry

data,2013.)

• With 31% of urban households & 9% of rural households consuming

branded edible oil, the national average approximately sums to 15.6%

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Consumption and Production in India

• Loose oil sales in India have dropped significantly from 74% in 2005 to 40% in 2013

• In 2012-13, sales of the packaged cooking oil in the country overall rose to 30%. And, the share of branded and packaged oil in the overall cooking oil segment shot up to 60 % from 45% in the previous year. Packaged cooking oil is expected to grab 80% market share by 2015

• India’s per capita consumption of edible oil rose from 3Kg annually in 1950 to 14.2Kg in 2011

• India’s per capita consumption of edible oil might rise by 4.19% in 2013

Source : Hindustan Times, Times of India and Business Standard

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The trends in oil demand

• Oil production share of various types in India

Production Consumption

Palm Oil* 1.07% 46.0%

Soya Oil 23.47% 16.2%

Rapeseed Oil 26.80% 11.1%

Sunflower Oil* 2.80% 7.9%

Cottonseed Oil 15.07% 7.2%

Groundnut Oil* 1.60% 2.4%

Rice Bran Oil 12.00% 5.2%

Others 17.20% 4.0%

46%

16%

11%

8%

7%

2% 5%

4%

Consumption of Various oils in India in 2011~12

Palm OilSoya OilRapeseed OilSunflower OilCottonseed OilGroundnut OilRice Bran OilOthers

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• The import of various oils in India are as follows:

• Palm oil is the mostly consumed oil and its production in India is the lowest

among all the other popular oils

• The anomaly in the usage pattern is that there has been an increased usage of

Palm Oil as compared to traditional usage of Groundnut Oil. This was mainly

post 1991

Imported (Mn T)% of total import

of oilsPalm Oil 7.5 77.5%Soya Oil 1.01 10.4%Rapeseed Oil 0.09 0.9%Sunflower Oil 1.08 11.2%

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Source: SEA India Online8 of 11


The future

• The expected production/import and consumption based on the past

trend is as shown:

*Considering 3% growth in population

All data Source: SEA of India

PARAMETERS 2013 2015* 2020*Population in Bn 1.22 1.25 1.32Total Demand (Mn T) 17.5 19 23.1Domestic Supply (Mn T) 6.8 8 9.2Import (Mn T) 10.5 11 13.9Import as a % Share of Demand 60% 57% 61%

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Reasons• The major reasons for the general increase in consumption of edible oil

were discovered as:– Overall increase in population– Change in food habits– Increase in per capita income– Health consciousness

• Recent paradigm shift was mainly due to the following reasons:– Higher cost in production of oils like groundnut oil as compared to Soya or

Cottonseed oil– Erratic monsoon affecting production– Due to the above two reasons, there has been an average fall of 8% in the

supply of oils like groundnut oil leading to rise in prices of these oils• Palm oil being cheaper than other options eventually became the

choice of people opting for economy

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Conclusion

• The reasons for the trend was clearly seen. Though health related issues also play a key role, the major reason behind the paradigm shift in the usage pattern was because of cost-effective alternatives

• Apart from increase in the usage of Palm Oil, the market for Olive Oil and Rice Bran are also new and attractive because of health related reasons

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cooking oil usage pattern in india avishek singal nimal nithyanandham ram mohan m.p ratnavel...

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