`India's New Olive Oil Sector - Olive Oil Times
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India's New Olive Oil Sector

By Abdul Zain Khan
May. 11, 2012 12:09 UTC


A Farmer in Himachal Pradesh (Photo: Michael Foley)

The olive oil mar­ket in India is grow­ing at a rate of 50 per­cent and pro­duc­tion, begin­ning very soon, will increases this poten­tial and demand.

Olive oil in India is in its nascent stage account­ing for just about 0.1 per­cent of the 3.5 mil­lion tons of the branded edi­ble oil mar­ket in the world’s sec­ond most pop­u­lous coun­try.

The Indian con­sumer typ­i­cally adopts mul­ti­ple oils at the same time. Oils are matched to recipes and the inten­sity of usage varies. With this in mind and with imports increas­ing to 6,798 MT there is a huge growth prospect in plan­ta­tions. These lit­tle green bulbs have the poten­tial to change the for­tunes of farm­ers.

Of course, India has seen olives since the Buddhist era, with the Tripitaka hav­ing innu­mer­able ref­er­ences of destroy­ing jaita­vans (Olives) by monks after pur­chas­ing lands. The first olive plan­ta­tion exper­i­ment was ini­ti­ated in 1885 at Kashmir, in an Indo-Italian merger. Other exper­i­ments included the Indo-Spanish ven­ture for Himachal Pradesh olive plan­ta­tions. Neither was suc­cess­ful to cul­ti­vate large scale olive pro­duc­tion.

The olive plan­ta­tions at Rajasthan began in November, 2006 and last year suc­cess­ful fruits were seen. With the press­ing units arriv­ing this sea­son, India is gear­ing towards suc­cess­ful olive cul­ti­va­tion and the results at all the 7 farms in Rajasthan are indeed very encour­ag­ing.

After the suc­cess of this ini­tia­tive, five more states are being researched by the gov­ern­ment for olive farm­ing. The Kashmir State is exper­i­ment­ing with the 60 vari­eties obtained from the U.S., Egypt and Italy. Six vari­eties have shown very good results. Gujarat olive plan­ta­tions are also show­ing suc­cess­ful cul­ti­va­tion. The var­i­ous olive sta­tions at Himachal Pradesh are increas­ing rapidly and need the right meth­ods to develop the plan­ta­tion fur­ther. India is now enter­ing into real olive oil pro­duc­tion.

Due to cam­paigns like ​“Olive it Up” and with com­pa­nies like Borges and Leonardo invest­ing money to develop their brands, the mar­ket is widen­ing and Indians are becom­ing more edu­cated about the qual­ity of oil. The present dis­tri­b­u­tion of olive oil is 55 per­cent pure, and 25 per­cent pomace and 20 per­cent extra vir­gin. The retail is cer­tainly dom­i­nated by pure olive oil which com­prises 62 per­cent vol­ume and 65 per­cent of value.

Olive oil is finally cre­at­ing a niche in India’s edi­ble oil mar­ket. Retail is the biggest seg­ment account­ing for 75 – 80 per­cent of sales; the insti­tu­tional seg­ment is still small account­ing for 30 per­cent of con­sump­tion (of which HORECA accounts for 80 per­cent of the insti­tu­tional vol­ume). With 60 per­cent of the national mar­ket being con­trolled by 3 com­pa­nies in India, and Spain and Italy account­ing for 90 per­cent of the import, there is def­i­nitely a poten­tial for other com­pa­nies and pro­duc­ers to enter the mar­ket and more are expected to do so.

There is a need for good con­sult­ing before would-be pro­duc­ers decide how to pro­ceed, as a num­ber of fac­tors includ­ing the plant vari­ety, cli­matic and soil con­di­tions and irri­ga­tion vary from one state to another and need to be best ana­lyzed. The exis­tence of upcom­ing con­sul­tan­cies, like Oliva International, hav­ing inter­na­tional roots, are an encour­ag­ing sign to the plan­ta­tion sec­tor at India.

On the other hand the gov­ern­ment projects should not be just focused on plan­ta­tions and buy-back oper­a­tions, but to pro­vide a struc­tured research into plan­ta­tions and vari­eties of olives, and so the ini­tia­tives of the ROCL for olive plan­ta­tion are encour­ag­ing.

A hectare of land costs just Rs. 15520 to the farmer of the actual cost of Rs.60145, which accounts for almost 75 per­cent sub­sidy and only the sub­sidy amount has to be paid at the nurs­ery by the farmer which is Rs.28.75/pt. Undoubtedly olives are a very ben­e­fi­cial remu­ner­a­tive option of crop diver­si­fi­ca­tion and the sce­nario of exceed­ing demand for olive oil than sup­ply is not going to be changed in the near future.

Indian olives will be in high demand in India as well as for export to other coun­tries once these upcom­ing plan­ta­tions begin to pro­duce. A stan­dard for olive oil is very nec­es­sary in India, both for import and pro­duc­tion. The FSSAI must open their eyes to this.

The gov­ern­ment has approved Foreign Direct Investment in Indian multi-brand retail, thus open­ing doors for for­eign retail­ers to estab­lish a broad based pres­ence in India. Currently India is con­sid­ered among the top retail invest­ment des­ti­na­tions by man­age­ment con­sul­tan­cies.

The Indian olive oil mar­ket pegged at Rs 52 Crores until 2006, is now at Rs. 380 Crores. With this expected boom to reach Rs. 550 Crores by the end of 2012 and as per the Indian Olive Association hopes to reach 2,5000 MT in 2020, inter­na­tional olive oil man­u­fac­tur­ers and pro­duc­ers are plan­ning their early entry into the Indian mar­ket. For sure ​“NOW” Is the best time to invest in plan­ta­tions, espe­cially for the new brands which want to gain promi­nence.

Could these adop­tions of new crops and farm­ing tech­niques be a step­ping stone towards the sec­ond Green Revolution in India?

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