Imported Edible Oils India Sample


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Imported Edible Oils India Sample

  1. 1. Imported Edible Oils - India December 2008
  2. 2. Executive Summary Edible oil imports have been liberalized since the 19--’s and now attract lower tariffs No import duty on crude oils in contrast to finished products (refined oils and hydrogenated fat) Market India is the world’s largest importer of edible oils and market demand is expected to sustain Loose or unbranded oil accounts for bulk of sales compared to branded and hydrogenated oils PLE Demand for imported oils to remain strong due to growing consumption and constrained supplies Characteristics SAM Organized sector, earlier disadvantaged due to sales tax regime, is not growing its market share Domestic production faces supply-side constraints and inefficiencies thereby ensuring the dependence on large levels of edible oil imports Rising consumption accompanied by increasing domestic production but large imports are still necessary to bridge the gap Trends Palm and soybean oils account for bulk of imports due to their low prices Prices have risen at a% p.a. with a dip observed only in 2005 - 2006 IMPORTED EDIBLE OILS – INDIA.PPT 2
  3. 3. •Introduction •Market Size and Growth •Segments •Market Characteristics •Trends IMPORTED EDIBLE OILS – INDIA.PPT 3
  4. 4. India is the largest importer of edible oils and the growing economy is expected to sustain demand in the market Overview Size and Growth • World’s largest net importer of edible oils since 19-- ‘000 MT • Large population and rising per capital consumption are 6,000 a% key drivers for this essential commodity 5,500 • Imports account for a% of total consumption LE 5,000 E • Imports have risen by b% since ’04-05 while total A C D domestic production has risen by c% 4,500 B • Palm and soybean oils dominate imports MP • Branded oils account for ~u% of total market 4,000 2004-05 05-06 06-07 07-08 08-09 Regional Consumption A SA North, Central and East Largest Trading Partners (2003-2008) Country X Others e% d% B West Country W c% C Central and South a% Country U D North and Central b% E Primarily in urban areas Country V Source: IMPORTED EDIBLE OILS – INDIA.PPT 4
  5. 5. Loose or unbranded oil without proper packaging accounts for a large portion of sales compared to branded and hydrogenated oils Loose Oil Branded Oil • Unrefined oils sold without any consumer-ready • Packaged pure refined oil primarily used in packaging or brand name households • Demand is largely driven by low income households • Available as sunflower oil (for its health benefits) LE as well as institutional customers but as well as rapeseed and peanut oil P • Peanut, cottonseed, sunflower seed and rapeseed • Demand is from middle and upper class urban oils are sold in this manner consumers increase margins M • Traders often use blends, legally or illegally, to SA Loose Oil a% b% Branded Oil c% Vanaspati Vanaspati (Hydrogenated Oil) • Fully or partially hydrogenated vegetable cooking oil is known as Vanaspati in India • Mostly manufactured using palm oil and also from soybean oil but typically made from the cheapest available oils meeting the required standards • Regulations mandate a% of production to be local but this rule is not effectively enforced Source: IMPORTED EDIBLE OILS – INDIA.PPT 5
  6. 6. Demand for imported oils will remain strong due to growing consumption and constrained supply side Domestic consumption – Edible oils Domestic Production - Oilseeds Consumption % Growth ‘000 MT ‘000 MT Growth V 6 40,000 13,000 U Y 4 30,000 Z 12,000 LE X 2 20,000 11,000 P 0 0 10,000 10,000 -2 0 2005 2006 2007 • Low but growing domestic consumption 2008 SAM 2009 Low per capita consumption of a kg compared to world 2000 2001 2002 2003 2004 2005 2006 2007 2008 • Low and inefficient production levels of oilseeds Virtually stagnant averaging at u mtpa average of b kg Yields are also significantly lower than the world average Yet overall consumption has grown at a healthy rate of c% Economic development is Since importing oilseeds is likely to increase per capita not practical due to consumption and spur the barriers, oil imports market become necessary Source: IMPORTED EDIBLE OILS – INDIA.PPT 6
  7. 7. Rise in consumption is accompanied by increasing domestic production but large imports are still necessary to bridge the gap Domestic consumption & supply Imports vs. domestic production ‘000 MT Consumption Production X Total in ‘000 MT 14,000 Imports Y 12,000 LE A B C D E F G H I 100% 10,000 90% 8,000 MP 80% 70% x% x% x% x% x% x% x% x% x% A 60% S 6,000 50% 40% 4,000 30% y% y% y% y% y% 20% y% y% y% y% 2,000 10% 0 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: IMPORTED EDIBLE OILS – INDIA.PPT 7
  8. 8. Thank you for the attention The Imported Edible Oils report is a part of Netscribes’ Food & Beverage Industry Series. For more detailed information or customized research requirements please contact: Natasha Mehta, CFA Subhash Chennuri Phone: +65 9651 6382 Phone: +91 98190 59664 E-Mail: E-Mail: About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. This report is published for general information only. Although high standards have been used in preparing this report, Netscribes (India) Pvt. Ltd. or Netscribes is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and no part may be reproduced without prior written permission. IMPORTED EDIBLE OILS – INDIA.PPT 8