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Demand for rice bran tops cooking oil trends in India
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Friday, 16 August, 2013, 08 : 00 AM [IST]
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Venkatesh Ganapathy
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fiogf49gjkf0d Nowadays, no blog or article on edible oil is complete without the mention of Rice bran oil. The interest in rice bran oil is not just because of its cheap price but also due to the nutritional benefits that this oil proffers.
Somewhere in 1995, I had the rare opportunity to attend an oil technology conference at IICT (Indian Institute of Chemical Technology, Hyderabad). A special demonstration of a new technology that could refine rice bran oil and also arrest the effect of lipase enzyme was shown to the participants. It was also intriguing because one wondered how something that was demonstrated at the pilot level could actually be scaled up. An upcoming technology called Physical Refining was being explored at that time to refine rice bran oil.
Today, after 18 years, the technology seems to be paying rich dividends as rice bran oil is popular oil. The growth of rice bran oil as an edible oil is proof of the positive impact of technology on our lives.
Rice bran oil production in India has grown 32% in the period between 2004-2013. India is the largest consumer of edible oils and produces 8.2 million tonnes and imports 11 million tonnes of edible oil to meet the annual domestic demand.
Rice is a staple diet for Indians. The demand for rice bran oil has boosted rice farming in India. Rice bran oil is characterized by low price, health benefits and superior cooking properties. India is the world’s largest rice bran oil producer and promotions for rice bran oil are happening both at the domestic and global level. This can be expected to lead to a further surge in the demand for rice bran oil.
As per data provided by Solvent Extractor’s Association of India, rice bran oil’s nutritional benefits are superlative in comparison to other edible oils.
India is the world’s second biggest rice producer at 104.22 million tonne this year. India has huge potential to scale up the production of rice bran oil. In the Union budget 2013-14, Indian government has abolished the duty on exports of de oiled rice bran, a by product of milled rice , used as a fodder. India exports 200,000 tonne of de-oiled rice bran every year. Vietnam is India’s biggest buyer of de-oiled rice bran.
In 2004-05, the rice bran oil production in India was 680,000 tonne. The estimated production volume for 2012-13 is 900,000 tonne. There is a potential to scale up this production to 14,60,000 tonne. The market for rice bran oil as a cooking oil is expected to grow by 15% to Rs 4,600 crore in 2013-14. Presently the market for rice bran oil is around Rs 4,000 crore. India has the potential to produce and consume 18 lakh tonnes of rice bran oil in the future. The current production of rice bran oil hovers around 80% of total production capacity. Rice mills in India are scattered and an optimal transportation time is vital to maintain the quality of rice bran oil. Recent research has focused on using pellitising machines to prevent deterioration in quality of brans during transit.
Rice bran is the outer coating of the rice kernel. It is removed from the white portion of rice through a process called as polishing. Polishing breaks up the coating into smaller particles which begin to oxidise almost immediately. Rice bran contains 15-20% edible oil. Rice bran oil has an ideally balanced fatty acid profile, is rich in natural antioxidants and has unique nutraceuticals.
When the bran is exposed to damp atmosphere, it readily absorbs moisture, the enzyme present in the bran becomes active and splits the oil into free fatty acids. The quantity of unsaturated fatty acids [85%] is higher than that of saturated fatty acids [15%] in the rice bran oil.
Rice eating nations lead in the production of rice bran oil. Japan, Thailand, China, South Korea are leading countries that produce rice bran oil. Japan has the latest technology in rice bran oil processing. India imports edible oil worth Rs 55,000 crore every year to bridge the gap between demand and supply of edible oils. According to the Solvent Extractors Association of India, with full exploitation of rice bran oil, the country can reduce its edible oil import bills by about Rs 3,000 crore a year.
The benefits of rice bran oil
Rice bran oil has the optimal balance of PUFA and MUFA. The saturated fatty acid content in rice bran oil results in a longer shelf life than sunflower oil. It is less greasy and has a higher smoke point making it the perfect cooking oil for frying purposes. Oryzanol, the natural antioxidant has proved to be good for the heart. Rice bran oil reduces bad cholesterol without affecting good cholesterol, thus balancing the cholesterol levels in the body. Globally, rice oil has been proved to reduce the risk of colon cancer. It is less sticky, has longer shelf life and is nutritionally superior. The fatty acid composition of rice bran oil is close to that recommended by World Health Organization. Rice bran oil is called as a heart oil in Japan and is considered as a health food in the US. The presence of MUFA (mono unsaturated fatty acid) is what makes rice bran oil special.
Of late, along with rice bran oil, canola oil is also gaining popularity. It is used in pickles and for salad dressings. It contains 10% linolenic acid and this limits usage of canola oil as a frying medium. Canola oil is rich in MUFA (mono unsaturated fatty acid) which helps to increase good cholesterol. It contains omega-3 and omega-6 essential fatty acids, anti oxidant Vitamin E, gamma tocopherol. Canola also has lower oil retention in fried foods but due to linolenic acid, Canola is not recommended for frying operations as oils that contain high amount of unsaturated fatty acids are susceptible to oxidation at higher temperatures. Some nutritionists recommend canola as an excellent frying medium but nothing can be farther from the truth.
Sunflower oil
Sunflower oil is characterized by little flavour. There are two types of sunflower oil – an oilseed type and the other a confectionery type. The latter accounts for only 10% of the total sunflower production. Dehulled seeds (kernels) are sold as confectionery nuts. Sunflower is a source of oil, lecithin, tocopherols and furfural. The oil content of the kernel varies from 48 to 53%. The protein content of the seed is 14-19%.
Sunflower oil has a light colour, bland flavour, high smoke point and good nutritional quality. The oil is extracted from the seeds or kernels by mechanical extraction and solvent extraction. Sunflower oil has high levels of linoleic acid. Saturated fatty acids constitute only about 15% while balance comprises unsaturated fatty acids like oleic and linoleic. Let us peek into the fatty acid composition of sunflower oil.
Sunflower oil, a nutritional supplement
Seeds produced in cool climates have higher levels of linoleic acid which may be 70% and above. It is free of toxic constituents and hence, sunflower oil has a high nutritional quality. The popularity of sunflower oil is mainly because of Linoleic acid which is considered as an EFA – Essential Fatty acid. There is another grade of sunflower oil called as High oleic sunflower oil that has 80% oleic acid. Due to its oxidative stability, it is a frying oil. In the last few years, intensive research has led to production of different grades of sunflower oil namely
High stearic/ high oleic sunflower oil
- High oleic oil
- High linoleic sunflower oil
- Mid oleic sunflower oil
Demand for sunflower oil grew in the late 80’s and 90’s and it became the largest selling oil in the branded oil segment. Sunflower is the crop of choice with wider adaptability and high yield potential. Last year, India’s sunflower oil imports grew by 42%. The total market size for sunflower oil is Rs 600 billion and the import-export trade is worth Rs 130 billion. India imports 40% of its consumption needs. Dhara sunflower oil is now revamping itself by positioning sunflower oil as an oil that is excellent for children’s health. Of late, share of sunflower oil is declining with competition from other oils. South East Asian palm plantations have grown ; globally sunflower oil production has taken a back seat due to intense competition from soya bean oil.
The demand for edible oils is growing at a CAGR of 4.43% over the period 2001 to 2011. The per capita consumption of edible oils is still lower. The edible oil industry has a favourable demand growth outlook.
Edible oil industry – recent developments
The Indian edible oil industry is highly fragmented with large number of participants in organized and unorganized sectors. Severe competition in the sector has led to thin profitability margins.
Share of branded oils segment is moving up due to rise in disposable income levels and increasing quality consciousness of consumers. Reduction in the import duties of crude oil in the last few years has boosted the prospects of domestic refiners. The players who have diversified by introducing blended edible oils have managed to stay afloat in the business. The organic as well as inorganic growth in the oil industry (by way of consolidation) augurs well for the future. In 1986, the Government of India established Technology mission on oilseeds and pulses (TMOP) to boost the production of oilseeds in India.
Until 1980s, 40% of India’s edible oil requirements were imported. The processing technology to manufacture cooking oils has improved by leaps and bounds.
Ills plaguing edible oil industry
After China and EU-27 countries, India is the third largest consumer of edible oils. Low productivity in under irrigated areas and shifting of acreage from oilseeds to other crops has led to the demand-supply gap. For a long time now, palm oil has become the staple diet of poor people in India. Sunflower oil , rice bran oil and olive oil are gaining acceptance in Southern and Western markets in India. Though mustard oil is produced in India, oils like soya bean oil continue to be imported. Palm oil imports from Malaysia have raised a few eyebrows as the imports continue to increase year on year. Shockingly, capacity utilization of Indian oilseed processors is as low as 30-40% - some plants operate only for a part of the year. Margins in edible oil businesses are shrinking due to intense competition, the presence of unorganized players, oil sold in loose and competition from imported edible oils.
(The author presently works as Associate Professor (Marketing & Operations) in Presidency School of Business, Bangalore).
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