Is India Poised for an Edible Oils Revolution?

At 24.20 mil­lion tons (mt) in 2016 – 17, and an esti­mated 23.95 mt in 2017 – 18, India’s edi­ble oil con­sump­tion stands at num­ber two glob­ally, behind China (35 mt). Seventy per­cent (14 mt) of this demand is met through imports, com­prised pri­mar­ily of palm oil (9.5 mt), soy­bean (2.99 mt), and sun­flower oil (1.54 mt). In fact, palm oil forms almost 40 per­cent of the total edi­ble oil demand in India.

Vegetable oil has been an indis­pens­able part of Indian house­holds and kitchens, its ori­gins traced to oil-seeds crushed in cold presses dri­ven by bul­lock carts and larger mechan­i­cal presses. The var­i­ous regions of India showed a pro­cliv­ity for a par­tic­u­lar type of seed, with the North and East cul­ti­vat­ing mus­tard, the South cul­ti­vat­ing sesame and coconut, and both the South and West cul­ti­vat­ing ground­nut. ​‘Desi ghee,’ made from milk, was the other form of edi­ble oil uti­lized pri­mar­ily in sweets and food for spe­cial occa­sions.

As the Indian edi­ble oil indus­try moved from hydro­genated veg­etable oil to sol­vent-extracted and refined oil, there was a rapid growth in demand and cor­re­spond­ing acreage of oil-seeds. At their peak, domes­tic oil-seeds pro­duc­tion stood at 21.5 mt in 1993 – 94, with India almost self-reliant. Post lib­er­al­iza­tion, how­ever, there was a surge in imports, grow­ing from 0.1 mt in 1993 – 94 to 14 mt in 2016 – 17.

Consumption pat­terns have shifted rapidly since then as well, as palm oil, soy­bean and sun­flower oil have become the pre­ferred veg­etable oils in the coun­try, while ground­nut, mus­tard, sesame and other local oils still man­age to retain some share region­ally. Nowadays, the lead­ing oils are pri­mar­ily imported in crude form and refined in the coun­try before being pack­aged and sold.

A qual­ity-con­scious Indian pop­u­la­tion has dri­ven the sales of branded pack­aged goods across the coun­try, with edi­ble oil lead­ing the way. Packaged edi­ble oil cur­rently stands at Rs 1.3 tril­lion ($19.5 bil­lion) in 2017, with a share of over 30 per­cent of the Rs 4.34 tril­lion ($65 bil­lion) pack­aged foods mar­ket. However, the per capita con­sump­tion still has poten­tial to grow, with India at 17 kilo­grams (kg) against the global aver­age of 25 kg.

According to the Global Burden of Disease report (Source — Institute for Health Metrics and Evaluation), 1.7 mil­lion Indians were killed by heart dis­eases in 2016, almost 10 per­cent of the global fig­ure of 17.9 mil­lion. A study con­ducted by AIIMS and ICMR states that Indians under 30 are at risk from heart ail­ments. Numerous aware­ness cam­paigns about the risk of LDL cho­les­terol and car­dio­vas­cu­lar dis­ease have been launched by the gov­ern­ment and health orga­ni­za­tions.

An increase in per-capita income, as well as aware­ness, has seen India move from ​‘loose’ edi­ble oil to refined, pack­aged options. The next step in the evo­lu­tion of Indian con­sumers has seen a larger focus on their and their family’s health. The urban Indian pop­u­la­tion, being well-trav­eled, dig­i­tally con­nected, and health-con­scious, has started opt­ing for health­ier MUFA, i.e., monoun­sat­u­rated fatty acids (olive oil, rice bran oil, canola oil, mus­tard oil, ground­nut oil) and PUFA, i.e., polyun­sat­u­rated fatty acids (sun­flower oil, saf­flower oil and corn oil).

Studies have shown that MUFAs lower the mor­tal­ity rate from coro­nary heart dis­ease (CHD), and lower the lev­els of total cho­les­terol and LDL cho­les­terol. These oils, par­tic­u­larly olive oil, also con­tain antiox­i­dants that lower pain in joints and reduces the risk of Alzheimer’s and Parkinson’s. PUFA show strong cho­les­terol-low­er­ing effects, along with improv­ing insulin sen­si­tiv­ity. They also boost the immune sys­tem, improve skin qual­ity and the func­tion­ing of the ner­vous sys­tem.

Olive oil, in par­tic­u­lar, has been accepted in Indian house­holds, and while the cur­rent import vol­ume stands at approx­i­mately 13,000 tonnes (0.1 per­cent mar­ket share over­all), there has been sta­ble growth year on year. Introduction of extra-light olive oils with a high smok­ing point has been instru­men­tal, as most Indian dishes involves cook­ing with high heat. In addi­tion, dietary shifts towards health­ier options like sal­ads have seen an increase in the demand for extra vir­gin olive oil as well. Marketing ini­tia­tives, such as those by the EU and Asoliva have also aided aware­ness.

The biggest chal­lenge remains pric­ing, as an increase in Indian import duties, appre­ci­a­tion of Euro against the Rupee, and higher prod­uct costs will result in a higher cost to the end con­sumer. The Indian Olive Association (IOA) has led a con­certed effort to cor­rect this pric­ing anom­aly, cit­ing the health ben­e­fits and lack of local com­peti­tors for imported olive oil in India.

The next step in this evo­lu­tion of the Indian con­sumer is yet to be writ­ten, as the worlds sec­ond-most-pop­u­lated coun­try stands on the cusp of a health rev­o­lu­tion that fea­tures health­ier, med­ically rec­om­mended oils at its heart. It remains to be seen what steps the Indian gov­ern­ment takes to sup­port the pos­i­tive momen­tum.

• Government of India


• Global Burden of Disease report