Edible Oil

AN OVERVIEW OF

EDIBLE OIL ASHISH JAIN MBA (AGRI BUSINESS)

PATH OF PRESENTATION

INRODUCTION

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7%

GLOBAL SCENARIO • Share in - 15.6% • Share in 9.2% • Share in - 7.4% • Share in 6.8% • Share in - 3.9%

world oilseed area world oilseed production

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world oilseed output world oil meal production world oil meal export

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STRUCTUTRE OF INDUSTRY

Sources : Directorate of Vanaspati, Vegetable Oil & Fats

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Installed Capacity and Prodution (MT /year) (2005-06)

CONT…. Potential from Non Traditional sources

SEGMENTATION OF OILS

Blended Edible Oil

PRODUCTION STATISTICS

(State – wise) *Total Production : 24289.4 (in ‘000 tonne) ‘000 hactare)

* Total Area : 26512.7 (in

CONTI….....

(Crop – wise)

(in ‘000 tonns)

CONTI…..

CONTI..

CONTI…..

• Total Edible oil Production : 65.7 Lakh Tonn (2007-08)

Oil Extraction and Expression Methods

OIL CAKES IMPURITIES

SWOT ANALYSIS FOR INDIAN EDIBLE OILSEED

STRENGTH Strong frontline extension network for technology dissemination

• Diverse agro – climatic situations •

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Semi arid ecosystem > 50% of area > 55% of prodn. Sub humid & arid ecosystem ~ 20% Strong research network for development of oilseed technology In 1967, AICRP on oilseed ( 5 crops) In 1972, 3 more crops In 1977, Project Directorate In 1979 & 1993, NRCs for groundnut & mustard respectively.

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Technology mission on oilseeds (TMO) Integrates scheme on Oilseeds Pulses, oilpalm and Maize (ISOPOM) Prodn & Distribution of quality seeds Impact of technology

• Human resource development • Initiatives from oil industry • • •

Contract farming – Punjab (100 acres) SEA of Punjab with Punjab Agro – Industries Corporation – projects. SOPA, COOIT - Platform for researchers, technocrats, industry representatives and consumers.

WEAKNESS • Production situation • •

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Farmers Training Centre

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Poor extension linkage

Present level of seed replacement (6 – 8%)

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Ineffective communication

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90% of budget is allocated to salaries and personal emoluments

Prone to 64 major diseases

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Absence of market mechanism to hedge the yield risk

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Little attention to disseminate oilseed technology

76% area under rainfed condition

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System constraints in public sector Transfer of oilseed technology Multiplicities of technology transfer Narrow focus of agricultural

• Processing situation •

Outdated technology

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Lower rate of utilization of installed capacity

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Low oil recoveries

OPPRTUNITIES • Production situation

• Supplementary oil sources

• Encouraging germplasm front with high level of resistance 19 (29.6%) and partial resistance 33 (51.5%) • Extending oilseed cultivation in underutilized farming conditions • Contingency farming

• From non traditional oil sources.

• Processing situation

THREATS • Production situation

• Processing situation

• Insufficient domestic supply • Continuous cultivation without any crop rotation • Vagaries of monsoon and pestilence • Liberalization of export import policies

• Underutilization of resources • Lack of assured market for oilseeds • The standards set by import countries are very high (Trade barriers)

DEMAND FOR EDIBLE OILS •

DEMAND PROJECTION FOR FUTURE

According to NCAER, • Edible oil demand - 20.16 m ton/annum in the next 7 years, given 6% rise in per capita income. (Presently – 12.5 mton /annum) • Increase in per capita consumption 4% population = 1.8% overall growth in demand = 6% • This means present level of production needs to be increase by three times to meet the projected demand. (Projection

AVAILABLITY OF EDIBLE OIL

Source : Solvent Extractors Association of India & Ministry of Agriculture

CONSUMPTION PATTERN OF CONSUMERS

CONT…..

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IMPORTS AND EXPORTS

EXPORTS

CONT..

STATUTARY REGULATIONS VEGETABLE OIL PRODUCTS ORDER, 1998 Removal of multiple authorities and agencies Removal of BIS certificate

EDIBLE OILS PACKAGING ORDER1998 to sold only in packed be Packers will have to register themselves,

SOLVENT EXTRACTED OIL, DE-OILED MEAL AND EDIBLE FLOUR (CONTROL) ORDER, 1967 30

DUTY REGIMES Custom Duty

CONTI… Import duty

CONTI… • Value Added Tax (VAT) • Differences in the percentage rates and rules from State to State. • 4% VAT + Octroi + Local Taxes = 6 – 7% Export-Import Measures

EDIBLE OIL : ON THE BOIL

FECTORS FOR FUTURE

MARKET SHARE OF MAJOR PLAYERS

Source: Ruchi soya

CONTI…

RECOMMENDATIONS FOR MARKETING • Better enforcement of regulated markets • Strengthening the appropriate market institutions • Introduction of forward marketing and contract farming • Promotion of market integration • Price incentives for edible oil shortage

• Better management of edible oil price fluctuation risk during shortage • Improving quality of information and efficiency of its dissemination • Rewarding better quality produce • Strengthening regulations regarding quality

REFERENCES • SAARCs OILS & FATS (March 08, July 08, August 08) • www.cooit.org • www.sea.nic.in • www.fcamin.nic.in • www.indiaagristat.com • www.indialawoffices.com

THANK YOU

• THANK YOU

• Top 10% population > 20 Kgs / capita • Bottom 30% population < 5 Kgs / capita

PACKAGED EDIBLE OILS • With growing quality consciousness and plummeting price, the packaged edible oil sector will capture 50% of the market share within three years. • The packaged edible oil consumption is only about 20% of the total 12.5 million tonne domestic consumption.

STATUTORY REGULATIONS • Vegetable Oil Products (Regulation) Order, 1998 • dated 16-12-1998 replacing the earlier two Control Orders, namely, the Vegetable Oil Products (Control) Order, 1947 and the Vegetable Oil Products (Standards of Quality) Order, 1975

• Edible Oils Packaging (Regulation) Order, 1998 • to ensure availability of safe and quality edible oils in packed form to the consumers

• Solvent Extracted Oil, De-oiled Meal