This document summarizes cooking oil usage patterns in India. It notes that annual consumption of cooking oils in India is 17.55 million tons and is dominated by palm oil, which accounts for 46% of consumption despite low domestic production of 1.07%. Demand for cooking oils is expected to continue rising along with population and income growth. Imports, which currently meet around 60% of demand, are projected to rise and meet an even larger share of total demand in the future. The key driver of changing consumption trends toward cheaper imported palm oil has been its lower cost compared to traditional domestically produced oils.

1. Cooking Oil Usage Pattern in
India
Avishek Singal
Nimal Nithyanandham
Ram Mohan M.P
Ratnavel Subramanian

2. AGENDA
• What are cooking oils?
• The consumption and production in India
• The trends in oil demand
• The future
• Reasons
• Conclusion
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3. What are the cooking oils?
• Cooking/Edible oils constitute a huge variety of oils extracted
from various natural sources like nuts, citrus, melon & gourd
seeds etc.
• The major differentiating factors in usage of these oils are:
– Availability
– Cholesterol content
– Taste
– Smoke point
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4. Consumption and Production in India
• Annual consumption - 17.55 m tons (Risen by 6% over last year’s usage)
• Total market size - Rs. 60,000 cr
• Total import-export trade - Rs.13,000 cr
• India’s packaged edible oil market - Rs. 24,000 cr (as per industry
data,2013.)
• With 31% of urban households & 9% of rural households consuming
branded edible oil, the national average approximately sums to 15.6%
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5. Consumption and Production in India
• Loose oil sales in India have dropped significantly from 74% in 2005 to 40%
in 2013
• In 2012-13, sales of the packaged cooking oil in the country overall rose to
30%. And, the share of branded and packaged oil in the overall cooking oil
segment shot up to 60 % from 45% in the previous year. Packaged cooking
oil is expected to grab 80% market share by 2015
• India’s per capita consumption of edible oil rose from 3Kg annually in 1950
to 14.2Kg in 2011
• India’s per capita consumption of edible oil might rise by 4.19% in 2013
Source : Hindustan Times, Times of India and Business Standard
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6. The trends in oil demand
• Oil production share of various types in India
Production Consumption
Consumption of Various oils in
India in 2011~12
Palm Oil*
1.07%
46.0%
Soya Oil
23.47%
16.2%
Rapeseed Oil
26.80%
11.1%
3%
Sunflower Oil*
2.80%
7.9%
7%
Cottonseed Oil
15.07%
7.2%
Groundnut Oil*
1.60%
2.4%
Rice Bran Oil
12.00%
5.2%
Others
17.20%
4.0%
Palm Oil
5%
4%
Soya Oil
Rapeseed Oil
46%
8%
Sunflower Oil
Cottonseed Oil
Groundnut Oil
11%
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Rice Bran Oil
16%
Others
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7. The trends in oil demand
•
The import of various oils in India are as follows:
Palm Oil
Soya Oil
Rapeseed Oil
Sunflower Oil
•
% of total import
Imported (Mn T)
of oils
7.5
77.5%
1.01
10.4%
0.09
0.9%
1.08
11.2%
Palm oil is the mostly consumed oil and its production in India is the lowest
among all the other popular oils
•
The anomaly in the usage pattern is that there has been an increased usage of
Palm Oil as compared to traditional usage of Groundnut Oil. This was mainly
post 1991
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8. The trends in oil demand
Source: SEA India Online
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9. The future
• The expected production/import and consumption based on the past
trend is as shown:
PARAMETERS
Population in Bn
Total Demand (Mn T)
Domestic Supply (Mn T)
Import (Mn T)
Import as a % Share of Demand
2013
1.22
17.5
6.8
10.5
60%
2015*
1.25
19
8
11
57%
2020*
1.32
23.1
9.2
13.9
61%
*Considering 3% growth in population
All data Source: SEA of India
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10. Reasons
• The major reasons for the general increase in consumption of
edible oil were discovered as:
–
–
–
–
Overall increase in population
Change in food habits
Increase in per capita income
Health consciousness
• Recent paradigm shift was mainly due to the following reasons:
– Higher cost in production of oils like groundnut oil as compared to
Soya or Cottonseed oil
– Erratic monsoon affecting production
– Due to the above two reasons, there has been an average fall of 8% in
the supply of oils like groundnut oil leading to rise in prices of these
oils
• Palm oil being cheaper than other options eventually became the
choice of people opting for economy
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11. Conclusion
• The reasons for the trend was clearly seen. Though health related issues
also play a key role, the major reason behind the paradigm shift in the
usage pattern was because of cost-effective alternatives
• Apart from increase in the usage of Palm Oil, the market for Olive Oil and
Rice Bran are also new and attractive because of health related reasons
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