India’s import-dependent edible oil market has plenty of potential for local manufacturers

The Indian edible oil consumption is growing at a staggering pace. India is one of the largest consumers of edible oil. The upturn in the market is rooted in numerous factors such as India’s large population, a spurt in middle-income households, India’s rich culinary tradition, and growing demand for low-fat oils. In the midst of the 90s, India’s overall per capita edible oil consumption was 7.4 Kg/ year. In the midst of the 2010s, it reached 18.4 kg.

In FY 23, oil seed production in India crossed 40 million tons, growing at a CAGR of 5.02% from FY 18 to FY 23. Despite growth in production, the Indian edible oil market is largely import-dependent as India imports around ~ 55% of its oil from outside. In fact, India is the largest importer of edible oil in the world. The country accounts for 15% of the overall oil imports in the world.

Traditionally in the west and south of India, ground nut oil is greatly used, alongside certain pockets where coconut oil and sesame are consumed. In the East, mustard oil is widely used. In the North Mustard oil and vanaspati are consumed.

The Indian governing agencies are thinking seriously about further developing local production and becoming self-reliant in edible oil production. The recent Ukraine- Russia crisis has also underscored the importance of reducing dependence on foreign imports. Other crises such as a decline in palm oil production in Malaysia and reduced soybean production in South America due to drought have further undermined global edible supply lines.


Factors driving growth in the edible oil market

As outlined below there are multiple factors that are fueling growth in the Indian edible oil market.

  • Structural parameters such as large population, expansive middle class, a surge in per capita income, and evolving consumer lifestyle will continue to drive demand for edible oil in India.
  • India is a nation with a rich gastronomic culture and heritage. It is home to 30+ major cuisines and its history of food dates back 5000 years.
  • In India’s retail basket of USD 1 trillion, food comprises around 35-40%. Large food retail naturally connotes growth in edible oil consumption. Likewise, India’s extensive growth in digital retail in recent years has also furthered the jump in oil consumption.
  • India’s rich agroclimatic zones make it a fertile ground for producing numerous oil seeds such as sunflower, ground nut, mustard, sesame seeds, etc.
  • In India traditionally mustard oil, sunflower oil, vanaspati oil (hydrogenated vegetable oil), coconut oil, sesame oil, etc. are widely used. Meanwhile, due to the growing healthy lifestyle, the demand for soybean oil, rice bran oil, and sunflower is also growing fast.
  • Presently 50-55% of the market is run by imports. Going forward, the governing agencies in India are committed to helping the country become self-reliant in oil production. By 2031, India plans to reduce oil imports to 23% of its overall consumption.
  • India aims to bring 338,100 hectares of land under oil seed cultivation from presently 287,600 hectares by 2031. Likewise, it is eyeing an annual production of over 60 million tons of oil seeds by 2031.

How The India Watch Can Help?

The India Watch is an India-centric feasibility study agency with a strong understanding of the agribusiness sector in India. If you are an MNC enterprise, private business house, cooperative society, PE investor, or any other entity with interest in India’s emerging agribusiness sector, The India Watch can help you with research, prefeasibility study and feasibility requirements.

Our range of services will include but not be limited to new businesses:

  • Detailed project reports and/ or preliminary analysis.
  • Project feasibility study for new business ideas.
  • Market and economic feasibility study
  • Business plan writing services
  • Pitch deck creation and design
  • Company incorporation services

Existing businesses can also hire our services such as:

  • Design and execution of market surveys
  • Custom market intelligence and information advisory
  • New market growth strategy
  • Strategic roadmap formation
  • Desk or secondary research
  • Thought leadership, research reports, & whitepapers
  • Data visualization, infographics, etc.

For any further business requirements, pls feel free to connect with us at info@theindiawatch.com

 

@ Copyright 2023, All rights reserved.