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Imported Edible Oils - India - Sample


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India is the largest importer of edible oils in the world post liberalization of oil imports and the report covers various factors that contribute to this trend as well as interpretation of key indicators.

An introduction briefly covers the history of oil import liberalization in India and the duty structure for different crude and refined oils. Market statistics indicate the share of imports, volumes, key trading partners, and consumption characteristics in India. End-market segmentation provides brief information on the share of each category, their demand drivers, and types of oils used.

The report also explain the reasons behind imports, the growth of organized players in a market largely dominated by unorganized sector, and the factors challenging domestic production leading to long-term reliance on imports. Data trends cover supply and demand, share of imports, the type of oils imported, and pricing in the local market.

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Imported Edible Oils - India - Sample

  1. 1. Imported Edible Oils - India December 2008
  2. 2. Executive Summary <ul><ul><li>Edible oil imports have been liberalized since the 19--’s and now attract lower tariffs </li></ul></ul><ul><ul><li>No import duty on crude oils in contrast to finished products (refined oils and hydrogenated fat) </li></ul></ul><ul><ul><li>India is the world’s largest importer of edible oils and market demand is expected to sustain </li></ul></ul><ul><ul><li>Loose or unbranded oil accounts for bulk of sales compared to branded and hydrogenated oils </li></ul></ul>SAMPLE <ul><ul><li>Demand for imported oils to remain strong due to growing consumption and constrained supplies </li></ul></ul><ul><ul><li>Organized sector, earlier disadvantaged due to sales tax regime, is not growing its market share </li></ul></ul><ul><ul><li>Domestic production faces supply-side constraints and inefficiencies thereby ensuring the dependence on large levels of edible oil imports </li></ul></ul><ul><ul><li>Rising consumption accompanied by increasing domestic production but large imports are still necessary to bridge the gap </li></ul></ul><ul><ul><li>Palm and soybean oils account for bulk of imports due to their low prices </li></ul></ul><ul><ul><li>Prices have risen at a% p.a. with a dip observed only in 2005 - 2006 </li></ul></ul>Market Characteristics Trends
  3. 3. <ul><li>Introduction </li></ul><ul><li>Market Size and Growth </li></ul><ul><li>Segments </li></ul><ul><li>Market Characteristics </li></ul><ul><li>Trends </li></ul>
  4. 4. India is the largest importer of edible oils and the growing economy is expected to sustain demand in the market <ul><li>World’s largest net importer of edible oils since 19-- </li></ul><ul><li>Large population and rising per capital consumption are key drivers for this essential commodity </li></ul><ul><li>Imports account for a% of total consumption </li></ul><ul><li>Imports have risen by b% since ’04-05 while total domestic production has risen by c% </li></ul><ul><li>Palm and soybean oils dominate imports </li></ul><ul><li>Branded oils account for ~u% of total market </li></ul>SAMPLE Overview Source: 06-07 07-08 2004-05 05-06 A E D C B 08-09 a% ‘ 000 MT Size and Growth Largest Trading Partners (2003-2008) Country U a% Country V b% Country W c% Country X d% Others e% Regional Consumption Primarily in urban areas E North and Central D Central and South C West B North, Central and East A
  5. 5. Loose or unbranded oil without proper packaging accounts for a large portion of sales compared to branded and hydrogenated oils <ul><li>Unrefined oils sold without any consumer-ready packaging or brand name </li></ul><ul><li>Demand is largely driven by low income households as well as institutional customers </li></ul><ul><li>Peanut, cottonseed, sunflower seed and rapeseed oils are sold in this manner </li></ul><ul><li>Traders often use blends, legally or illegally, to increase margins </li></ul>SAMPLE a% Loose Oil b% Branded Oil c% Vanaspati Loose Oil <ul><li>Packaged pure refined oil primarily used in households </li></ul><ul><li>Available as sunflower oil (for its health benefits) but as well as rapeseed and peanut oil </li></ul><ul><li>Demand is from middle and upper class urban consumers </li></ul>Branded Oil Vanaspati (Hydrogenated Oil) <ul><li>Fully or partially hydrogenated vegetable cooking oil is known as Vanaspati in India </li></ul><ul><li>Mostly manufactured using palm oil and also from soybean oil but typically made from the cheapest available oils meeting the required standards </li></ul><ul><li>Regulations mandate a% of production to be local but this rule is not effectively enforced </li></ul>Source:
  6. 6. Demand for imported oils will remain strong due to growing consumption and constrained supply side <ul><li>Low but growing domestic consumption </li></ul><ul><ul><li>Low per capita consumption of a kg compared to world average of b kg </li></ul></ul><ul><ul><li>Yet overall consumption has grown at a healthy rate of c% </li></ul></ul>SAMPLE 2005 Y 2006 Z 2007 U 2008 V 2009 X Consumption Growth 0 ‘ 000 MT % Growth Source: 2004 2005 2006 2007 2008 ‘ 000 MT 2000 2001 2002 2003 Domestic consumption – Edible oils Domestic Production - Oilseeds Economic development is likely to increase per capita consumption and spur the market Since importing oilseeds is not practical due to barriers, oil imports become necessary <ul><li>Low and inefficient production levels of oilseeds </li></ul><ul><ul><li>Virtually stagnant averaging at u mtpa </li></ul></ul><ul><ul><li>Yields are also significantly lower than the world average </li></ul></ul>
  7. 7. Rise in consumption is accompanied by increasing domestic production but large imports are still necessary to bridge the gap SAMPLE Consumption Production Imports 2001 2002 2003 2004 2005 2006 2007 2008 2009 ‘ 000 MT Source: D 2004 x% y% E 2005 x% y% F 2006 x% y% G 2007 x% y% H 2008 y% I 2009 X Y x% y% A 2001 x% y% B 2002 x% y% C 2003 x% y% x% Domestic consumption & supply Imports vs. domestic production Total in ‘000 MT %
  8. 8. Thank you for the attention 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. The Imported Edible Oils report is a part of Research on India’s Food & Beverage Industry Series. For more detailed information or customized research requirements please contact: Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, 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 prior permission is required for guidelines on reproduction. Natasha Mehta, CFA Phone: +65 8448 0449 E-Mail: [email_address] Gagan Uppal Phone: +91 98364 71499 E-Mail: [email_address] Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on