The Indian Edible Oil Industry of India is projected to grow from around $21.5 billion in 2019 to $35.2 billion by 2025 due to rising disposable income and growing consumer awareness about healthy lifestyles and health. Furthermore, the country’s edible oil consumption is increasing due to leading edible oil brands, changing consumer tastes and preferences, growing population, and changing usage patterns towards branded oils.
Consumption of Indian edible oil is expected to increase in the country due to increasing access to processed foods. In 2019, soybean oil accounted for one-third of India’s edible oil market. Other major oils include mustard oil, palm oil, and sunflower oil. The olive oil segment continues to gain market share in India; however, the production share was only 1% in 2019.
The oil and fats industry of India dates back to at least the Vedic period, over 4,000 years ago, when India was an important producer of oils and fats. Today, it’s one of the fastest-growing industries in the country, with well-established international players setting up shop in India to take advantage of its cheap labor and growing demand for edible oils. However, like many things related to the Indian economy and Indian culture, the industry has its own quirks that may not be immediately obvious to outsiders. Here are five facts about the Indian edible oil industry that you probably didn’t know
72% Of Edible Oil Production Is Consumed Within The Country
One of the major reasons behind surging imports is increasing consumer demand from emerging sectors such as food service and pharmaceuticals. Already, edible oil exports have been banned and imports are now restricted to 5% of consumption through licensing, which has led to high rates of smuggling or grey imports. Meanwhile, imports are further expected to rise as consumption increases at a pace much faster than that of domestic production. Further, consistent declines in international edible oil prices are also boosting its attractiveness for domestic manufacturers. Under such circumstances, Indian importers will look for ways to buy edible oil from overseas countries where it’s currently not under restrictions.
90% Of Edible Oil Being Imported Is Palm Oil
It may surprise you to learn that roughly 90% of edible oil being imported into India is palm oil. What may be less well known is how large of a proportion of total imports edible oils make up and how just one crop makes up such a big chunk. Pulses (chickpeas, kidney beans, and so on) account for 5% or so of imports, and then what’s left is accounted for by sunflower seeds and soybeans. Consider that despite its size and density, Singapore imports just as much palm oil as does all of India!
60% Growth In Edible Oil Consumption Predicted By 2030
With demand for edible oils predicted to increase by 60% between 2016 and 2030, according to a report published by Crisil (ICRA ratings), many believe it’s only a matter of time before India becomes one of Asia’s largest edible oil-importing countries. This could present significant opportunities for global players looking to benefit from long-term growth forecasts. One notable example is Unilever—which recently signed an agreement with Video Agro Private Limited. The latter is part of Radhakrishna Foodland Pvt Ltd, which reported revenues of over Rs1 billion ($16 million) in 2015–2016. This increase in consumption of edible oil can beneficial for many edible oil sellers.
26.2 Million tonnes – Annual Production
The one thing you don’t know is that 63 lakh tonnes of edible oil are consumed every year. That’s an average of 2 kg per person, per month! If you haven’t already guessed it, we’re talking about Indians and their favorite source of edible oil – coconut oil. This represents over 80% of total annual consumption while groundnut, sunflower, and mustard oils account for only 12%, 7%, and 5% respectively. Of these 63 lakh tonnes of coconuts, around 47 lakh tonnes are crushed by more than 30 thousand private units into desi Mayans (coconut oil) or sold as copra for further processing into refined products like vegetable ghee or vanaspati.
63 Lakh Tonnes – Annual Consumption
Statistics from market research firm Euromonitor International reveal that Indians consume 63 lakh tonnes of edible oil annually. There are four main ways Indians buy edible oil: they grow it, import it, sell it, or process it. Due to recent concerns around olive and palm oils, a growing number of companies are looking to meet demand by importing an increasingly varied range of oils. While onsite consumption is growing rapidly and Indian farmers continue to produce large quantities of oilseeds, there’s still a massive gap between these two endpoints. Many people don’t know how important edible oils are for a healthy diet, or why so many people prefer imported rather than domestically sourced products.
The Indian Edible Oil Industry is growing rapidly thanks to increasing consumer demand and increased awareness about the benefits of eating healthy oils. We’ve shared some interesting facts about the edible oil industry in India that you may not have known. From the growth of the edible oil sector to the various benefits of consuming edible oils.