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Puri Oil Mills sees benefits for India from fall in imports of veg oil
Wednesday, 21 November, 2018, 08 : 00 AM [IST]
Our Bureau, Bengaluru
Puri Oil Mills has observed that India is an edible oil-deficit economy and the annual imports lead to an enormous outflow of valuable foreign exchange. However, the sharp decline in the imports of vegetable oils from 14.8 lakh tonne in May 2017 to 10.5 lakh tonne in July 2018 (a 27 per cent fall) is great news for the country.

According to the Solvent Extractors’ Association of India, annually, vegetable oil imports have declined by about six per cent for the first time in eight years. Earlier, from 2009-10 to 2016-17, imports had surged by 78 per cent. The total demand for 2017-18 was estimated to be around 23 million tonne. According to the Ministry of Agriculture, the demand-supply gap (that is bridged through imports) is 15 million tonne. On an average, imports account for around 70 per cent of India’s edible oil consumption.

The situation is exacerbated by the fact that edible oil consumption is growing at a rapid pace. Interestingly, in 2017, edible oil became India’s largest packaged food item, with annual sales exceeding Rs 1.3 million, as per Euromonitor International. The trend shows no signs of abating. “Edible oil consumption is expected to exceed 34 million tonne by the year 2030, according to a RaboResearch paper,” said Umesh Verma, general manager, marketing communications, Puri Oil Mills.

Of the total amount of vegetable oils imported, 52 per cent is palm oil and 42 per cent is soy sunflower refined oil. While none of these are particularly healthy for Indian consumers, they continue to be imported in huge quantities to meet the rising levels of demand.

“To some extent, the encouraging drop that was witnessed in July 2018 may be attributed to steps taken by the Government of India in March 2018, wherein there was a hike the duty on vegetable oil imports were hiked from 33 per cent to 48.4 per cent. However, there is another factor that contributed to this decline in demand - the growth in the consumption of India’s very own mustard oil,” Verma added.

“India produces around 8-9 million tonne of mustard oil annually. Mustard is an important cash crop, the area under cultivation being over six million hectare. In fact, mustard accounts for 30-35 per cent of India’s overall edible oil production,” said Verma.

Even though there is a geographical bias in its usage, Indian consumers use mustard oil in large quantities. A study conducted jointly by Yale University and Princeton University found that 90 per cent of mustard oil in India was used for cooking, while only 10 per cent was used for pickling, massage, hair care, etc.

“The spiralling demand for mustard oil is also being felt by marketers,” noted Vivek Puri, managing director, Puri Oil Mills.

“Our company, that manufactures P Mark Mustard Oil and across all our markets, the demand for mustard oil has been rising sharply and our multiple manufacturing facilities have been working on a 24X7 basis to meet this surging demand,” said the Puri Oils chief.
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