In Europe it is the olive oil which rules the market of edible oil. India, which is the highest consumer of edible oil in the world, banks heavily on palm oil as olive oil is still considered ‘champagne oil’ which is expensive here. Majority of the Indians stack up their kitchen with palm oil and this allows countries like Malaysia and other east Asian countries to find market in India.
“Yes, India is the biggest consumer of palm oil in the world as it is the cheapest. At the moment the production of palm oil has gone down so it may give space for other vegetable oils in India. But soon palm oil will be back. Olive oil is a status symbol these days,” said the chairman of LMC International Dr James Fry.
Even though India has primarily been an agricultural state, production of palm oil in India has been low and it has to import a huge amount from countries like Malaysia, Indonesia etc. There is a bit of history. May be 20 years ago there was technology mission on oil seeds in India and the aim was to ensure that India would remain self-sufficient in edible oil.
“The problem in my opinion is that what economist call the comparative advantage, in India it does not favour the oil. You are good at growing some grains, pulses but you are not so good in growing crops that are having high oil content. India is not naturally well endowed in production of edible oil,” added Dr Fry.
However, the growth in consumption of palm oil in India has shown very encouraging signs.
Roughly, for every one per cent growth in GDP in India vegetable oil demands grows slightly faster, which can be called as ‘income elastic’. Also the population too is growing at a brisk pace in India and hence the demand for more vegetable oil.
“India consumes about 15 per cent of the global palm oil production, which is the highest in the world,” added Dr Fry on the sidelines of the Globoil 2016 conference here in Goa.
Sime Darby Edible Oil, a Malaysian company is the largest producer of the palm oil in the world and 60 per cent of its produce is consumed by India. China follows next with about 13 per cent.
Speaking to Herald, the managing director of Sime Darby Datuk Franki Anthony Dass said, “We started in 1910 and it is now the world’s largest listed plantation company and largest producer of certified sustainable palm oil in the world. India is a very important market for our company. Nearly 60 per cent of our palm oil is consumed by India. In 2009 India’s consumption share was hardly 14 per cent, but today it is 60 per cent.”
India’s consumption of vegetable oil is growing at the rate of 4.4 per cent per year. “I am sure that out of that 4.4 per cent 50 per cent has to be in the palm oil sector. Our challenge now is to produce palm oil with sustainability. I do plan to spread in India on the downstream side but in the upstream we will like to concentrate in Malaysia and our existing production units,” added Datuk Franki Anthony Dass.
Managing director of Tefla’s Kailash Singh who was the key person to organise the Globoil 2016 said, “This is the 20th year of this conference. Today we have representatives from 35 countries with a delegate strength of over 1000 and crème de la crème of the edible oil producers in the world are here.”
