FNB News - "In India, canola oil has just 0.1% market share"

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"In India, canola oil has just 0.1% market share"

Tuesday, 01 October, 2013, 08 : 00 AM [IST]

The Canola Council of Canada is a non-profit trade organisation that aims to spread awareness about the various health and culinary benefits of canola oil. Its mission is to advance the growth and outlook of the canola industry, which contributes billions to the Canadian economy each year. Bruce Jowett, VP, market development, Canola Council of Canada, in an email interaction with Priyanka Dhomse, shares details on the edible oil in India and Canada and its import and export. Excerpts:

Tell us about the edible oil market in India.
India is the number one importer and number two consumer of edible oils in the world. India currently consumes about 17 million tonne (170 lakh tonne) of oil a year but produces only about 7.5 million tonne (75 lakh tonne) of it, importing about 9.5 million tonne (95 lakh tonne).

How will you compare the Indian edible oil market to that of Canada?
Canada consumes a lot less oil than India and is one of the world’s top exporters of edible oil. So it is opposite of India in terms of supply and demand in this category. Canola oil is the number one edible oil by volume in Canada. In India, canola oil has just 0.1 per cent market share of the vegetable oil sector. But it is number one in health: Canola oil has the least saturated fat (7%) – about half that of sunflower (12%), olive (15%), soybean (15%) and groundnut (19%) oils – and the most Omega-3 fat of all common cooking oils. Canola oil is also a good source of vitamins E and K.

At what rate the Indian imports of edible oil will decline and how the market will be affected by the same due to drop in prices?
It is highly unlikely that imports of Indian edible oil will decline given the fact that vegetable oil consumption in India is increasing by about 400,000 tonne or 4 lakh tonne (nearly 4%) per year. Another 3.2 million tonne (32 lakh tonne) of oil will need to be produced and/or imported by 2020 to meet demand. Healthier oils are specifically being sought by the growing middle class. Domestic production of oilseeds is not expected to increase significantly and the rupee is fluctuating. So the prices of imported edible oils are unlikely to decrease.

Tell us about the prospects of edible oil market in Canada compared to India.
The edible oil market in Canada is expected to remain stable with canola oil being the primary oil consumed and exported. We expect to see imports of canola oil continue to increase over the coming years in India. It is possible for imports to double next year and in the longer term, increase from 0.1 to at least 1 per cent market share in the edible oil segment. Healthier oils with lower saturated fat content are good for public health, especially in India, where heart disease is the number one cause of death. This applies to Canada as well.

What are regulatory aspects the Canada follows while exporting the edible oil to India and other countries?
All Canadian food products – whether for export or domestic use – go through stringent quality and safety checks to ensure they are suitable for human consumption. When exported to another country, these products must meet that country’s quality and labelling requirements. Both exporters and importers work together to ensure that country standards are met.

Is there any plan by Canola Council of Canada to export any other products to India?
The Canola Council of Canada is a non-profit trade association that has member companies which sell canola oil to India. The council itself does not sell any canola products, it simply promotes them. Member companies who are exporting canola oil to India will likely focus on selling more of the commodity oil.

At what rate Canada exports the edible oil to India? How many varieties of edible oil is been exported by your country to India?
In 2012, canola oil sales to India in were 16,321 tonne – an increase of more than 4,000 per cent from 394 tonne in 2011. Given that India imports about 9.5 million tonne of oil each year, there is great potential to get a lot more canola oil into the marketplace. Also, Indian consumption and consumer knowledge of oil is going up and domestic production of oilseeds is going down, so increased imports of healthy oils such as canola seem likely. The Canola Council of Canada can only speak to canola oil exports to India, not other edible oils made in Canada. However, flaxseed oil would be another example of a Canadian export.