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Indian edible oil

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INDIAN EDIBLE OIL Nitesh Kumar Pandey England
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Page 1: Indian edible oil

INDIAN EDIBLE OIL

Nitesh Kumar PandeyEngland

Page 2: Indian edible oil

Oil & Oil Seeds

• India being deficient in oils has to import 40% of its consumption requirements.

• With an annual consumption of about 11 mln. Tonnes, the per capita consumption is at 11.50 kgs, which is very low compared to world average of 20 kgs.

• China is currently at 17 kg.

Page 3: Indian edible oil
Page 4: Indian edible oil

Overview of Edible Oil Economy

• Indian vegetable oil is world's fourth largest after USA, China and Brazil.

• Oilseed cultivation is undertaken across the country in two seasons, in about 26 million hectares; mainly on marginal lands, dependent on monsoon rains (un-irrigated) and with low levels of input usage.

• Yields are rather low at less than one ton per hectare.

Page 5: Indian edible oil

Overview of Edible Oil Economy

• Three oilseeds - Groundnut, Soybean and Rapeseed/ Mustard - together account for over 80 per cent of aggregate cultivated oilseeds output.

• Mustard seed alone contributes Rs.120,000 Mln. turnover out of Rs.600,000 Mln. oilseed based Sector domestic turnover.

• Cottonseed, Copra and other oil-bearing material too contribute to domestic vegetable oil pool

Page 6: Indian edible oil

Overview of Edible Oil Economy• Currently, India accounts for 7.0% of world

oilseeds output; 7.0% of world oil meal production; 6.0% of world oil meal export; 6.0% of world veg. oil production; 14% of world veg. oil import; and 10 % of the world edible oil consumption

• With steady growth in population and personal income, Indian per capita consumption of edible oil has been growing steadily.

• However, oilseeds output and in turn, vegetable oil production have been trailing consumption growth, necessitating imports to meet supply shortfall.

Page 7: Indian edible oil

Market Potential• The per capita consumption of oil in India is 11.5

kg/year is way below the world average of 18 kg. Even china is at 17 kg. By 2010 the per capita consumption of oil in India is likely to be 15.6 kg. There is huge potential of growth.

• The demand for edible oils is expected to increase from Oil Year 2004-05 levels of 10.9 Mln. tonnes to 12.3 Mln. tonnes by 2006-07 (two years). This assumes a per capita consumption increase of 4% and a population growth of 1.9% which translates to an overall growth in demand @ 6% p.a. Based on the above assumptions, edible oil demand in the year 2015 is expected to be 21.3 million tonnes.

Page 8: Indian edible oil

Demand Projection Edible Oil2004 2010 2015

Total Demand (Mln. Tonnes)

10.9 15.621.3

Total Area under Oilseeds (Mln. Hectares)

23.4 28 32

Yield (Tonnes/hectare)

1.07 1.2 1.4

Production of Oilseeds (Mln. tonnes)

25.1 33.6 44.8

Domestic supply of edible oils (Mln. tonnes)

7 10.1 13.4

Total edible oil imports - (Mln. tonnes)

4.3 5.9 8.3

Imports as share of demand

39.40% 38.10% 39.50%

Page 9: Indian edible oil

Demand Projection (Contd.)

• India will continue dependence on imports to the extent of 40% of its consumption requirements. The improvement in yields and the increase in area under cultivation will ensure that the domestic oilseed production is sufficient to meet 60% of consumption requirements.

Page 10: Indian edible oil

Indian Horticulture-StrengthsIndian Horticulture-Strengths

• Horticulture contributes 28.5% of GDP in agriculture and 52% of export share in agriculture from cultivated area of 8.5%

• Varying agro climatic conditions permit cultivations of all types of crops found world over

• Fairly good research infrastructure available through, NRC’s, SAUs

• Seasonal advantage for export to temperate countries• Largest producer of banana, mango and cabbage• Largest producer and consumer of cashew and spices• Increasing role of private sector in research, seed

production, PHM & microirrigation equipments, processing and exports

Page 11: Indian edible oil

Production Trends of Horticulture in India

Page 12: Indian edible oil

Exports of fresh vegetables from India to the world

Page 13: Indian edible oil

Problem Area in Horticulture Problem Area in Horticulture • Large area under old/ senile plantation• Poor quality of seeds/ planting material and low

rate of replacement of seeds/ cultivars• Lack of irrigation• Economy of scales• Inadequate storage and cold chain• Inadequate research, extension and credit support• High wastages of the produce (8-37%)• Only 0.8% of produce is processed• Inadequate processing and marketing

infrastructure• Inadequate institutional support particularly in NE

and other hilly region

Page 14: Indian edible oil

Problem Areas- contd..Problem Areas- contd..

• Lack of awareness about importance of fruits and vegetables as nutritional supplement

• Inadequate safety standards, infrastructure for quality check and enforcement mechanism

• Weak database

• Ill equipped Departments in States

• Poor HRD infrastructure

• Little hedge against uncetaininty / risks

Page 15: Indian edible oil

STATUS OF FOOD PROCESSING INDUSTRIES

• Size of food market in India - Rs. 8,60,000 Crores • Primarily processed food market – Rs. 2,80,000

crore.• Value added processed food market – Rs. 1,80,000

crore.• The Sector attracted a total investment of Rs.38,531

Crores during the 9th plan period• Investment during the 10th plan is estimated at Rs.

62,105 Crores. • Industry growth rate during the last five years is

estimated at 7.14% against GDP of 6.2% • Investment required during next ten years – Rs.

1,50,000 crore.

Page 16: Indian edible oil

LEVEL OF PROCESSING, VALUE ADDITION ETC

• Fruits & Vegetables Sector at 2%, • Poultry 6%, • Milk 35% (only 13% in modern

dairies), • Marine products 8%, • Buffalo meat 21%. • Value addition 20%• Wastage – Rs. 58,000 crore

Page 17: Indian edible oil

CONSTRAINTS OF FPI SECTOR

• Lack of suitable infrastructure • Lack of adequate quality control & testing

infrastructure• Inefficient supply chain vis a vis involvement

of middlemen• Lack of processable varieties of farm produce• Seasonality of raw material• High inventory carrying cost • High taxation, high packaging cost • Affordability and cultural preference of fresh

food.

Page 18: Indian edible oil

ROLE OF MFPI

(a)Policy support

(i)FPI sector delicensed except alcoholic beverages(ii)FPI included in priority sector of lending (1999)(iii)100% FDI on automatic route(iv)Excise duty waived on F&VP (from 2000 – 01)(v)Income tax holiday for F&VP (from 2004 – 05)(vi)Customs duty reduced on freezer van from 20 to

10% (from 2005 – 06)• Contd…

Page 19: Indian edible oil

(b) Promotional support

(i) Assistance for workshop / seminars / fairs / exhibitions

(ii)Assistance for studies / surveys(iii)publications / Films 2) Regulatory

(i) Implementation of FPO(ii)Implementation of MFPO(iii)Enactment of FSS Bill 2005


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